Unstoppable Gold

Gold’s up nearly $100...again...as I write, and even I’m stunned by this rally.

This run in gold, now to over $3,400 on a spot basis, has been so remarkable that even the major media are, well...remarking on it.

That leads, of course, to the talking heads trying to explain it. And, true to form, they’re taking their shots and badly missing.

Many are crediting the jump in gold to the drop in the U.S. dollar, and given this slide in the greenback, that’s not surprising.

Others are blaming this $100 jump on an escalation in President Trump’s rhetorical war on Fed Chairman Jerome Powell. I’m sure this is a factor for some, but you would think it’s obvious that the strategy behind getting Powell gone would be to get interest rates lower. So if that’s what the market is thinking, then why are stocks selling off and the 10-year yield rising?

Then others are saying that today’s jump in gold — and the coincident nose dives in stocks, the dollar, and bonds — are due to a continuation of the “selling America” theme.

As the Wall Street Journal summed up:

The "Sell America" trade picked back up on Monday.

Stocks fell, with the Dow industrials dropping 1,100 points and on pace for their worst April since 1932, and the dollar hit fresh multiyear lows against the euro and other major currencies. Yields on longer-term Treasurys rose, and gold surged to a fresh record high.

Markets are on edge about President Trump's tariff war as well as his threats to fire Fed chief Jerome Powell. Trump on Monday demanded lower rates in a post on social media, saying costs are trending downward and the economy could slow "unless Mr. Too Late, a major loser, lowers interest rates, NOW."

On Friday, when markets were closed, National Economic Council Director Kevin Hassett underscored the White House's displeasure with Powell, saying officials were studying his removal.

An early set of data from trade bellwether South Korea showed a big drop in exports to the U.S. this month.

Give them credit, because that’s closer to the mark in explaining not only today’s big jump in gold, but its astounding run so far this year.

In my opinion, anyone who focuses on any single factor behind gold’s surge is missing the big picture. As I also wrote last week:

“...Gold has been telling us that
it’s not one thing. It’s everything.”

As I’ve written for decades, one of the hallmarks of a bull market, in any asset, is when every new data point is interpreted bullishly.

By this measure alone, gold is in a historic bull market...because even if a development sends Treasury yields rising or the dollar strengthens, it almost always sends gold rising.

And it’s not just a matter of interpretation — it’s cold, hard facts.

It’s a fact that 45 years of ever-easier money and ever-greater debts have built a debt trap that cannot be escaped without a major devaluation of fiat currencies around the globe.

Smart investors know this. Gold knows this. And gold’s tremendous run over the last 14 months is not so much a prediction of what is to come as it is a recognition of the current situation.

The good news is that you can protect yourself against the coming great currency devaluation by buying gold now to protect those funds against the decline in purchasing power.

To get Brien Lundin’s ongoing commentary on the markets at no charge, click here to subscribe to his free Golden Opportunities newsletter.

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