Gold may face previously unforeseen resistance
This will sound insane. Mainly because it is.
Gold has in the past few years created a double top on the monthly chart. This is problematic, as the bias is bearish and the breakdown target would send gold to 1300 in a descending wedge with a bullish breakout target that could create one of two head and shoulders formations. One is slanted upwards, which is the sort of H&S you'd prefer to see. The other is flat to down, and that's the one that would suggest that gold will enter into a state of price discovery where we may find that it's worth about ten dollars an ounce in 2040 US dollars. Think, like, forty cents in 2022 terms. On its face, this is a ridiculous scenario. As we enter into a global food shortage during the possible beginning of an extended period of global conflict at a time when global birth rates have fallen flat, it's becoming increasingly clear that the world's population could be easily cut in half within two decades. Starvation along with the loss of the entire baby boomer generation alone would hit those numbers. Gold isn't edible. Gold doesn't grow wheat. Gold isn't widely used in energy production. It is not a necessity.
Gold is used in jewelry - a luxury good. Gold is used in electronics. No matter how accustomed to using electronics we are, Electronics are luxury goods. Sure, there's gold in every cell phone, but that won't help the price of gold much when most of the world's population devotes half of their income to food expenses and the other half to energy needs. Gold is the byproduct of a remarkably destructive industry which already does too little to power itself through clean energy. An industry which pollutes heavily, destroys drinking water, and displaces communities. Sometimes - not often, but sometimes - gold fuels dictatorships. These are facts of the industry that will not be changed easily. You can't change where a gold mine exists. Consider the impact that climate concerns has had on Bitcoin. Now imagine those same concerns being applied to a far more rigid network of centralized systems predominantly using fossil fuels to generate pollution through excavation in remote areas. Speaking of Bitcoin parallels, gold's 12 candle chart resembles Bitcoin's monthly chart. That's concerning because gold has had 70% drops before. It can drop 70% again no matter who tells you what. Gold to $1,000 USD around 2030 doesn't look too unlikely to me.
My bullish case for gold is that after a lengthy retracement down to the 1300 area, it manages set an unimpressive higher high of around 2700 somewhere near perhaps 2045. Accounting for inflation, this would optimistically make gold an incredible way to turn your dollars into quarters. I am not bullish on the future of gold.
Gold has in the past few years created a double top on the monthly chart. This is problematic, as the bias is bearish and the breakdown target would send gold to 1300 in a descending wedge with a bullish breakout target that could create one of two head and shoulders formations. One is slanted upwards, which is the sort of H&S you'd prefer to see. The other is flat to down, and that's the one that would suggest that gold will enter into a state of price discovery where we may find that it's worth about ten dollars an ounce in 2040 US dollars. Think, like, forty cents in 2022 terms. On its face, this is a ridiculous scenario. As we enter into a global food shortage during the possible beginning of an extended period of global conflict at a time when global birth rates have fallen flat, it's becoming increasingly clear that the world's population could be easily cut in half within two decades. Starvation along with the loss of the entire baby boomer generation alone would hit those numbers. Gold isn't edible. Gold doesn't grow wheat. Gold isn't widely used in energy production. It is not a necessity.
Gold is used in jewelry - a luxury good. Gold is used in electronics. No matter how accustomed to using electronics we are, Electronics are luxury goods. Sure, there's gold in every cell phone, but that won't help the price of gold much when most of the world's population devotes half of their income to food expenses and the other half to energy needs. Gold is the byproduct of a remarkably destructive industry which already does too little to power itself through clean energy. An industry which pollutes heavily, destroys drinking water, and displaces communities. Sometimes - not often, but sometimes - gold fuels dictatorships. These are facts of the industry that will not be changed easily. You can't change where a gold mine exists. Consider the impact that climate concerns has had on Bitcoin. Now imagine those same concerns being applied to a far more rigid network of centralized systems predominantly using fossil fuels to generate pollution through excavation in remote areas. Speaking of Bitcoin parallels, gold's 12 candle chart resembles Bitcoin's monthly chart. That's concerning because gold has had 70% drops before. It can drop 70% again no matter who tells you what. Gold to $1,000 USD around 2030 doesn't look too unlikely to me.
My bullish case for gold is that after a lengthy retracement down to the 1300 area, it manages set an unimpressive higher high of around 2700 somewhere near perhaps 2045. Accounting for inflation, this would optimistically make gold an incredible way to turn your dollars into quarters. I am not bullish on the future of gold.
Comment:
Shortly after this was posted, gold lost the support of its range and currently looks even more so poised to visit 1300. A deposit of gold valued at 12 trillion USD was discovered in Uganda following the posting of this idea. Gold currently has a market cap of 11 trillion. The argument for gold to 1000 by 2030 suddenly has a very real narrative.