From the Desk of Ian Culley @IanCulley
Investors love a good gold debate.
“Is it a commodity, or is it a currency?”
I’d argue it’s both.
But, today, I want to focus on gold as a currency in light of a series of new all-time highs versus fiat overseas.
Gold priced in euro terms closed last week at its highest level in history.
The new all-time highs follow a breakout from an 18-month consolidation within an ongoing uptrend – an uptrend that commenced in March 2020.
I expect another leg higher for gold priced in the euro and the British pound.
Check out gold versus the pound:
Gold priced in GBP resembles the gold/EUR chart, just not as clean.
Gold completed a decade-long base versus the pound in the spring of 2020. And like gold priced in US dollars, it consolidated for over two years.
The main difference: Gold priced in USD continues to contend with overhead supply while the path of least resistance leads higher for gold priced in British pounds.
It’s the same story for the Japanese yen.
Before you start throwing tomatoes, here’s what’s not making new highs versus the yen: the US dollar.
We can chalk the USD/JPY rate to the Bank of Japan’s yield curve control policy. And, yes, everything priced in yen seems to be screaming up and to the right.
But the simple fact gold belongs on the “better than the yen” list is information.
Many well-respected analysts and talking heads are whining about how terrible gold is.
I’d also be salty if I held gold since the summer of 2020, waiting for an epic rally.
Just remember that the market has an uncanny ability to wear down weak hands right before a significant turn.
A turn in gold is upon us, and a sustained uptrend lies ahead, especially it’s posting new all-time weekly closing highs priced in Australian dollars, Canadian dollars, New Zealand dollars, and Norwegian krone:
New all-time highs for gold are commonplace, with the lack of new highs isolated to the US dollar.
I don’t know when gold will break out, priced in USD. It could be next month or next year.
But considering the above charts, it seems more a matter of “when,” not “if.”
Stay tuned.
Click here to watch this week’s Gold Rush Video:
Thanks for reading.
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Allstarcharts Team
