Posted on 2020-01-22 19:19:00
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At the very worst, it would go to around $1,400, which is really nothing in the futures market. As we speak, it’s $1,504. It’s been solid for weeks, so the downside risk is minimal, and the upside is very strong.
I’ve been saying for six years that gold had to break about $1,450 an ounce for it to gain real strength. It’s hit toward the $2,000 market, and it’s going to keep going.
What are the risk factors?
The major one is that the global economy gets really strong, currencies regain their value and people are happy with investing in securities markets. So, the stronger the dollar and the economy gets, the weaker gold goes. But the equity markets have peaked. I’ve said this for five months now. They’ve had their best day.
Why are interest-rate cuts positive for gold investing?
Because the dollar is getting cheaper relative to other currencies. This year already, 30 central banks — in Iran, India, Mexico [for example] – have lowered their interest rates. They’re all in trouble. They need money.
The central bank in Germany — the strongest economy in Europe – just warned that they’re going into recession. They’re going to keep printing more money, but the money is valueless. The only reason the U.S. dollar is staying so strong is that the other [currencies] are so weak.
What does the price of oil have to do with gold?
A lot. If war breaks out in the Middle East, you’re going to see oil prices spike above $100 a barrel. That will bring down the global economy in equity markets, and it will be the beginning of World War III.
What’s going on now with two nuclear-armed nations — Pakistan and India — is a clear indication of the dangers ahead. India has lowered their interest rates four times in a row. Pakistan has no economy left. They’re borrowing money from anybody they can.
Look what’s going on in Argentina [worries over debt default]. The U.S. is in better shape than all the other countries, but it’s only temporary. That’s why Trump is calling for lower interest rates. He knows.
What specifically has he done about the situation?
Last week [Aug. 14], when the market was going down 800 points, he called the major banks. In the next three days, the markets went up. Christmas Eve of 2018 [when markets plummeted], Treasury Secretary Mnuchin got on the phone and called up six banks.
The markets went up 1,000 points in a couple of days. You just saw the same thing happen. They’re rigging the markets. They’re bringing in [the president’s] “Plunge Protection Team” [created in 1988].