By Brien Lund
Gold just set a new record high, although you’d be forgiven for not noticing it in the absence of hype or even commentary.
This furtive bull run, accomplished without the help of Western investors and simply With the Fed poised to pivot, this will be a very good year for gold miners.
It seems like the whole world is taking these last few days off, and so am I.
But as gold has just set a new record and is flirting with a key level, I forced myself to come and offer you some notes.
An “interesting” year and month
Gold ended up rising about 14% for the year, but it wasn’t simple or easy. Despite what was arguably the most severe tightening cycle in central bank history, gold not only held on, but also managed to To advance.
And, true to form established over the past 12 months, 2023 has been an interesting year.
Gold Chart 2023
Looking at last month in the chart, we see the remarkable rise to $2,150 on that infamous Sunday evening earlier this month, and the slam that quickly followed on Monday morning.
The result of this push was a drop below $2,000, and the typical calls for “one last dive before we fly away” coming from various corners of the gold bug universe.
This was not the case, as gold began to rise steadily, even as traders and speculators began to shift their attention to the holiday season and year-end positioning.
This stealth rally brought us to a record closing high of $2,089 this week, without any fanfare or even mention in gold forums, much less in the mainstream financial media.
This rebound, like those of recent months, was not driven by Western investors, but by central banks and Eastern buyers. We know this because holdings in the main tool of Western gold speculators, GLD The gold ETF was largely unaffected by gold’s fall rally… and completely unaffected by its most recent rise.
As I’ve said in recent weeks, this means there’s still enormous buying power in this bull market, especially considering that Western investors generally follow trends. Furthermore, central banks can print as much money as they want to buy gold, and it seems unlikely that their appetite will diminish any time soon.
From a technical point of view, it’s very simple: $2,100 or bankruptcy. If gold fails to rise above this level, to establish a clean break from previous rallies, this one will quickly be seen as just another failure – a quadruple peak, if you will.
The good news is that, from a fundamental perspective, the odds favor gold breaking $2,100 very soon.
As I predicted a few months ago, markets are now pricing in the Fed’s inevitable pivot – and given its stellar performance as Powell & Co. eagerly raised rates, gold should be the one of the biggest beneficiaries when they finally begin the reduction cycle.
If you’ve listened to my advice over the past year, you’re well-positioned for this move.
In short, it looks like we will have a very good year ahead and we are certainly ready for it.
Editor’s Note: The summary bullet points in this article were chosen by the Seeking Alpha editors.