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THE CASE FOR NOW INCREASING YOUR GOLD ALLOCATION
THREE CHARTS
I have attached three charts that illustrate two points:
1-That the Gobal Central Banks see & know something fundamental and longer term has changed,
2- What the approaching Recession & Dollar concerns mean relative to gold.
1- GLOBAL CENTRAL BANK GOLD PURCHASES
Global Central Banks have been aggressively accummulating Gold Bullion since Covid-19 prompted massive expansion of the global money supply by them (all currencies).
2- OFFICIAL GOLD v US TREASURY PURCHASES
Overal foreign official purchases of US Treasury bonds to hold their FX Reserves in has been plummeting, while global central bank purchases of gold (in blue) has been significantly rising.
3- GOLD v US DOLLAR PRICES
As a positive investment theme we can see that the US Deficit is about to widen significantly.
The last time the deficit reversed from a narrowing trend and began a major widening trend, back in the early-2000’s, it coincided with a major top in the dollar index, which evolved into a major bear market for the greenback (inverted in the chart I am showing here), lasting roughly a decade.
This was one of the primary catalysts for a major bull market in the price of gold which rose from a low of $250 in 2001 to a high of nearly $2,000 a decade later.
DOLLAR PRESSURES LONGER TERM:
The preponderance of economic analytic work that we have examined suggests further US Weakness going forward. However, if the unfolding global slowdown causes major financial disruptions, a dollar flight to safety can be expected, despite the current media onslaught of negative US dollar news!
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