This chart (XAUUSD/M2) is why I believe Commodities are going to rise in price for some time. I do not believe they have fully accounted for all the excess of currency supply we have accumulated in the last 4 months (from $15.4T to $18.4T USD), which has risen an unprecedented 20% from March until now according to the M2 chart. I believe we are now only at the start of seeing Commodities account for inflation due to excess Bond, Cash, and Bank Credit creation, partly fueled by the low lending rates. As you can see below, the last time this chart peaked was back in 2011. This seems to line up with when Gold reached its historic all time high (around $1920USD/oz) which held for the last 9 years. We are now back at this ATH and have gone beyond, however this chart is still does not seem to line up with this recent peaking of Gold. For this reason, I believe this chart has waaay more room to fly and take all Commodities up with it, and I can already see the patterns emerging indicating this. I believe you can park your cash in any Commodity for the time being and expect a return. The red flag for me to exit would be when the Fed decides to raise interest rates to curb inflation.
Comment:
So.. according to this chart, there is still a potential of 90% increase remaining to reach the same peak as from 2011. If they don't increase the key lending rate, this could indicate a price of Gold of around $3725 USD/oz in the near future to account for all this inflation in the currency supply. For Silver (via Silver/M2 chart), there is 315% rise remaining to reach the top, indicating a price of $76.5 USD/oz.
