News | The Investor
19 Jun 2021 7:05
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Sport
  • Weather
  • Finance
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business > Features > The Investor

    Gold Breaks Through $1000

    Gold has finally broken through $1,000 again, an important key resistance level. Most people refer to the current gold bull market as a repeat of the 1970s. This is true since there are many similarities of price movement between the two. The sheer extent of the Bull Run in gold now and in the 1970s also link the two periods.

    Investment Research Group
    Investment Research Group
    The U.S. government abandoned the gold standard of fixing gold at $35/oz, opening the flood gate in early 1972. We saw gold quickly explode to $200 in 3 years. Then there was a severe correction, bringing gold back to $100, a 50% retreat, lasting for almost 2 years.

    However, the $100 mark, once broken, became a resistance in 1976 for gold. Gold has never fallen below $100 since.

    But we did see a 20 year bear market in gold, where the metal completely lost its lustre. Things were going too well for gold to really perform.

    It took the meltdown of our banking system in 2005 to bring gold back to the fore.
    The well known analyst, Thomas Z. Tan, believes the breach of $1000 last week is a significant event.

    "An even round number of $1,000 is always an important level for any actively traded securities," he says. "Since early last year, gold has attacked this level 3 times, including the current 3rd time and succeeded breaking it. As it is often said, the 3rd time is the charm.

    "Will gold stay above $1,000? Who knows? However, the chance is very good that gold will never fall back to $1,000 level again on the monthly chart."

    Tan supports this alarming gold price prediction with an equally alarming economic outlook.

    "The worst is yet to come," he says. "The first phase of the banking crisis has only wiped out bank equities, but the second phase will wipe out many bondholders".

    In 2007, says Tan, "I successfully predicted the collapse of the banking industry and $1 trillion in losses. Looking back, my prediction was too conservative, and probably should have said several trillion."

    "The banking industry has already gone through the first phase of free fall, with the Fed dumping trillions of taxpayer's money implicitly and explicitly to provide some temporary shoring. However, the upcoming second dip will be much worse, with the commercial real estate market taking the same percentage hit as its twin sister, the residential market."

    "When the second economic dip comes, dumping money like we did during the first one won't work. We have already seen the sign of diminishing effect. The biggest impact is always when it was done the first time.

    “The more money being dumped, the less effect it has on the system. Pretty soon we will only see the unexpected and unwanted negative consequences of this monetary inflation."

    It is this prospect of rising inflation in a troubled global economy that is giving gold its appeal to many investors.

    Inflation and the prospect of an ever weaker US dollar is part of the story that has enabled gold to break $1000.

    In this sense, says Tan, "gold not only saves people during inflation, but also during depression. Gold is the only credible, trustful, fair, safe and honest asset left in the whole universe. It is the foundation on which all other assets are built upon.
    This is the only asset which can, once and for all, end the capital manipulation, distortion, rip-off, and cover-up by Wall Street during 20 year Greenspan era."

    © 2021 David McEwen, NZCity

     Other The Investor News
     12 Sep: Fixed vs. floating rates – which is best for you?
     Top Stories

    Disappointment from Taranaki head coach Neil Barnes, that loose forward Lachlan Boshier has been let go by New Zealand Rugby More...

    The Auckland Tuatara will miss a second straight Australian Baseball League season, citing ongoing uncertainty around Covid-19 More...

     Today's News

    Scarlett Johansson is grateful her Marvel alter ego Natasha Romanoff is no longer “hyper-sexualised” 6:41

    Melbourne United's won the opening game of the Australian basketball league against Perth 73-70 6:26

    Dwayne 'The Rock' Johnson didn't have "political passions" until the public called on him to run to be President in the future 6:11

    Taliban taking back territory as Australian and US forces prepare to leave Afghanistan by September 23:26

    Rugby League:
    Adam Pompey has bounced Rocco Berry out of the Warriors side to play the Knights tomorrow 21:56

    Kanye West "likes spending time" with Irina Shayk and is happy to enjoy things as they progress 21:41

    Law and Order:
    Police say they'll be reviewing their footage from a major gang member's funeral...and following up any infringements 21:16

    Dwayne Johnson has topped PEOPLE magazine's list of 100 Reasons to Love America 21:11

    Cheryl eats a meat-free diet three or four days a week 20:41

    Kelsey Grammer has teased "some things will be different" with the 'Frasier' reboot 20:11

     News Search

    Power Search

    © 2021 New Zealand City Ltd