If the West follows suit, the gold party will continue.

Last Updated: 6. Dezember 2023By

On Friday the price of gold jumped to a new all-time high, then on Sunday it surged by another 75 US dollars before dropping again on Monday. But not only gold, all markets are currently being traded in a hectic manner. In other words: Something is going on – and savvy investors should be prepared for it.

What was to be expected: Correction in gold price after being overbought Source: stockcharts.com

Gold nevertheless remains in a bull trend.

Gold rally without the West Considering that the price surge of the past weekend was largely attributable to a geopolitical hotspot (in case you hadn’t noticed: the Houthi rebels, supported by Iran, attacked a US destroyer in the Red Sea), it must be clear that this has no influence on gold’s longer-term fundamentals.

With one exception: The open hostilities are likely to raise concerns among countries that do not belong to the Western circle of influence as to how long the US will allow itself to be provoked on so many fronts. Because in turn this supports fears that the US could strike back in an all-out economic round (as the mistress of the US leading currency), gold is obviously being purchased for hedging – in every country that might have something to fear. And not only there …

And this is the real crux of the gold rally, which has been going on for some time now (not just the jump to the weekend record high):

This gold rally is largely taking place without the Western investors.

But this also means that a lot of capital is not yet tied up in gold, as many investors have not yet invested in gold.

The total ETF gold holdings still need to respond to the rising gold price.

These are actually very good news for the gold price, as there is still a lot of „ammunition“ for this gold rally that has not yet been used.

This fact is one of the most important reasons for the continuation of the overall gold rally in the medium term.

West – when will you follow? We are also currently seeing a recovery of the dollar index and rising US government bond yields as the market digests some of the stubbornly hawkish comments from US Federal Reserve President Jerome Powell.

In the next few days I would not be surprised by much for gold, but I remain extremely optimistic for gold in the future. Investors are almost getting into a frenzy trying to forecast a turnaround of the Fed or a recession that the Fed desperately needs to react to. And ultimately the Fed will have no choice.

Gold will then also be one of the biggest beneficiaries of this turnaround in the West. Don’t forget: Gold has developed remarkable resilience as the Fed raised interest rates and real interest rates rose. Once these burdensome factors are gone, Western investors will follow their Eastern brothers and the gold price can shoot up to solid heights.

Currently I would recommend to you: Observe and get on board while it’s still cheap.