Could gold and the US dollar rise in tandem?

by Peter Degraaf

Featured is the weekly gold chart, with the US dollar at the top. Five times during the past five years did gold and the US dollar rise in tandem. The sixth time could happen any day. In 1973 and in 2005, gold and the mining stocks rose along with the U.S. dollar from April to December.

“The study of money, above all other fields in economics, is one in which complexity is used to disguise the truth, or to evade truth, NOT to reveal it.” …..John K. Galbraith.

S. there is scarce. total debt has risen above the 100% mark. has always been brought about by a bankruptcy. as a percentage of GDP. sometimes by an avowed one but always by a real one. I believe a single instance of their having been fairly and completely paid. “When national debts have once accumulated to a certain degree.” ……Adam Smith (The Wealth of Nations – 1776). It is most likely going to be inflated away. Gold and silver will benefit. though frequently by a pretended payment. This debt will never be repaid. . The liberation of the public revenue if it has ever been brought about at all. . Louis shows U.This chart courtesy Federal Reserve Bank of St.

shows the disconnect between Median Household Income and Federal Government spending. none has been more effective than that which deludes them with paper money. Census Bureau and Office of Management and Budget.This chart courtesy U.” Daniel Webster .S. “Of all contrivances for cheating the laboring classes of mankind.

when gold bottomed out at $1. There are 45 funds short – well over twice the average and very close to the record of 48. their net long position (green line) is close to all-time lows.com shows the current long vs short positions among hedge funds. Furthermore. the last time managed funds held record shorts was in May 2012. Interestingly. Here are the comments that came with the chart: Managed money (ie hedge funds) is short of 47.357 gold contracts. a record.com shows the upward trend in the money supply of the five major central banks.This chart courtesy Hindecapital. and can be seen as the red line in the chart below. This chart courtesy Goldmoney.540 before rallying to the .

is at the lowest point in four years.800 October high.000 contracts – the lion’s share of the reduction being the counterpart of the managed money position. This chart courtesy Businessinsider. managed funds in gold are as good a contrary indicator as you can get.$1. On that basis. which control prices in futures markets. are reducing their shorts and have cut their net short position in gold by 60.com shows the amount of gold as a percentage of the total assets owned by hedge funds. From a contrarian viewpoint this is bullish news. The bullion banks. .

shows that while central banks are trying to hold the gold price down. Based on a change in standard deviation.S.. . Global investors and Bloomberg shows a similar oversold indicator. This chart courtesy USfunds. GFMS. this index is currently at a reading similar to the condition in 2008 – 2009.com. Thompson Reuters. WGC. just before a big run-up in the price of gold.This chart courtesy U. they are also buying gold while the price is low.

as long as the capitalist system lasts. I advise you. the low gold price caused a sharp increase in demand at the US Mint. And with all due respect for those gentlemen. vote for gold.com shows the reason why the manipulators in gold gave up (at least for now) on Wednesday Feb 20th. “You have a choice between the natural stability of gold and the honesty and intelligence of the members of government.This chart courtesy Zerohedge. As this chart shows." …. . This demand was a reflection of gold demand worldwide.George Bernard Shaw.

com. The ‘anti-silver cartel’ had to pull back or face being over-run by demand.This chart is also courtesy Zerohedge. Just like the chart above it. . the demand for silver rose sharply as investment demand grew as a direct mirror image to the drop in price.

the expectation is that gold will also keep on rising. In view of the fact that the red and blue lines are continuing to rise.This chart courtesy Erste Group Research shows the correlation between GDP in India (red) and China (blue). . along with the gold price in yellow.

James Sinclair. who is there when gold goes to four figures. Since the bull market began. twice on this weekly chart did the RSI (top of chart) dip below ‘30’.” …. Trading is a game won by a few. but lied about by many.Featured is the HUI index of gold and silver producers. “The greatest profits will be made by the long-term investor without margin. and in both cases the dip in the RSI was followed by a multi-year rise. It did not stay there long. .

once decoupled from gold backing. The Bank of Canada has since 1980 sold 98% of its gold holdings and ‘invested’ the proceeds in U.com shows the Bank of Canada is in lockstep with the major central banks as far as QE is concerned. eventually became worthless. and there is nothing new under the sun. Historically all currencies. Quoting King Solomon: ” That which has been is what will be.This chart courtesy Zerohedge.D. That which is done is what will be done. Not very bright! Conclusion: It is now been 78 weeks since gold reached a new all-time high price. The correction of 2006 took 71 weeks. When time is up – price will follow” . The correction in 2008 took 77 weeks. Quoting W. which are not backed by gold. There are no exceptions. Gann: “The most important thing of all is the Time Factor. dollar denominated bills and bonds. which I use in making up my annual forecasts.” 940 BC. Ecclesiastes 1:9.S.

pdegraaf. For a sample copy drop him a line at itiswell@cogeco. I am NOT responsible for your trading decisions.com   .DISCLAIMER: Please do your own due diligence. He produces a daily market letter for his many subscribers. Investing involves taking risks. Happy trading! Peter Degraaf is an online stocks and bullion investor with over 50 years of investing experience.net or visit his website www.

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