Andrew Maguire explains the market forces powering gold's surge to an all-time high - and why it isn't over yet.
‘Talking Gold’ - a fortnightly update from Kinesis Director and precious metals expert, Andrew Maguire, providing a detailed round-up of the recent action in the gold and silver markets - a regular feature from the Kinesis Youtube show ‘Live from the Vault’.
In this week’s breakdown of the gold and silver markets, Andrew Maguire looks at the impact of strong bullish drivers on gold’s recent surge to an all-time high.
The precious metals expert explores how the unwinding of paper market liquidity has sent gold through these long-standing bearishly structured technical resistances - and why the gold price still has a long way to go.
Strong bullish drivers
As Andrew Maguire sees it, the current global environment has created a “perfect storm,” of strong bullish drivers, producing an unprecedented global demand for physical gold and silver bullion.
Even at a glance, the economic and political landscape explains such extraordinary demand:
- 0 - negative interest rates.
- M2 at 24%.
- Central banks are de-dollarizing.
- Debt to GDP rising to 127%.
- Geopolitical and Political risks are escalating.
- The FED nationalising bonds.
Over the next few years, Andrew Maguire predicts the competing gold demands of sovereign banks will continue to serve as a major bullish driver for gold, propelling gold and silver significantly higher.
Watch Andrew Maguire and, investment professional, David Tice foresee the recent surge in the gold price in last week’s Talking Gold from fortnightly Kinesis show ‘Live from the Vault’.
Is gold overbought? And, is it going to crash?
For many, however, the question lingers - is gold going to experience a crash in price?
Throughout the history of COMEX, whenever the gold long side builds up and a large number of undeliverable contracts are purchased, market making insiders intervene. Through utilising massive position concentration against them, insiders were able to profitably flush these long positions at will.
Any technical trader taking a cursory look at the current RSI (Relative Strength Index) will tell you there are various signs that gold is overdue a drop in price. However, in these unique market circumstances, Andrew Maguire reports that technical overbought indicators are being swamped by the aforementioned strong bullish drivers.
As the market making insiders are under pressure to supply physical bullion, they are scrambling to exit remaining naked short positions. Where naked shorting futures contracts was once a near riskless route to profit, strong bullish drivers have repackaged them as a sure-fire way to lose money.
Such conditions are restricting the market making insiders' ability to influence the gold and silver price on the COMEX. Amidst all this market commotion, for the first time in recent years gold has turned from a ‘sell the rally’ market to a ‘buy the dip’ market.
What does this mean for gold?
With these strong bullish drivers showing no indication of letting up, and market making insiders exerting less and less control over the paper markets, Andrew Maguire believes we are experiencing exceptionally promising conditions for gold and silver investors.
According to Andrew Maguire, over time, these unprecedented conditions will result in gold breaking through the $2000 dollar per ounce mark - and way beyond.
Andrew Maguire’s parting thought:
Expect some really volatile sessions, maybe, on the way to $2500, but don’t be phased, in my view, these stops are not flushable - dips will be bought.
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Next Episode: Andrew Maguire sits down and talks all things gold and silver with a special guest from the precious metals industry.