Gold's 1900+ Track Looks To Be In Santa's Sack


It being toward year-end our good friends over at again asked us to soothsay that which we see for next year. Thus we also think it apropos by which to open as follows:

Toward 2021: Gold and the S&P 500

Gold: A year ago in this paragraph we penned: …priced per this writing at $1,482, our valuation measure by debasement alone of the U.S. money supply (M2) is Gold $2,991. No, price shan’t rocket up that far in 2020…”

With Gold today priced at $1,890, our debasement value of Gold is $3,600: and given all the additionally COVID-induced debasement, Gold ought have a super 2021, perhaps not reaching all the way to $3,600. But should history yet again repeat, Gold eventually will catch up to debasement value: thus price remains terrifically undervalued and shall move up into uncharted territory above the recent all-time high of $2,089 as 2021 unfolds.

The S&P 500: A year ago in this paragraph we penned of : “…the President being re-elected…but the Trade of the Year is to sell the S&P going into Election Day…”

Wrong we were. And yet the S&P is now even more excessively expensive as we’ve ever seen it: upon Tesla (TSLA) being added to the Index, our “live” P/E stands to exceed 60x. Pardon the drama, but that is stock market suicide. Especially as at this writing, the yield on the “riskless” Bond is 1.676% vs. that on the “risk unlimited” S&P only being 1.532% Uh-ohhh… And should the S&P halve itself, it would still by lack of substantive earnings be expensive.

So there it is. Plus, as herein penned and graphically depicted (per last week's missive) of Gold's rise into year-end over recent years, it's thus far again playing out. Moreover, just in time for Santa's sleigh ride around the world. For as we go to Gold's weekly bars from a year ago-to-date, in settling out Friday at 1887, price is now well within range to take out the overhead descending red dots of parabolic Short trend so as to flip them Long in the ensuing week. (That of course barring a bunch of Short Scrooges hitting underlying bids to make it all go wrong). But the point is: with Gold at 1887, the flip price as depicted at 1925, and our "expected weekly trading range" now at 77 points, the 38-point run up to eclipse the red dots is well within range. "Now, Dasher! Now, Dancer! And the balance of you bunch! Let's DO this!" (A little poetic license, there):

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