$4,000 GOLD: The Everything Bubble or Fiat Collapse? | Gary Wagner
Summary
Gold Market Dynamics: Gold is trading at unprecedented levels, surpassing $4,000, driven by a combination of factors including geopolitical tensions and economic policies.
Market Outlook: The discussion raises the question of whether we are in an "everything bubble" or witnessing a unique behavior of gold compared to other asset classes like the S&P 500 and Bitcoin.
Fiat Currency Devaluation: A significant theme is the devaluation of fiat currencies due to large government deficits, which enhances the perceived stability and intrinsic value of gold.
US Dollar Strength: Despite a US government shutdown, the US dollar shows strength, which is analyzed in the context of its relative performance against other currencies like the euro and Swiss franc.
Gold Price Forecast: Gary Wagner discusses the challenges of predicting gold prices in uncharted territory, with current targets set between $4,150 and $4,300, influenced by Fibonacci analysis.
Investment Strategy: Emphasis is placed on holding physical gold as a long-term investment strategy, suggesting it as a hedge against currency devaluation and economic uncertainty.
Historical Context: The podcast highlights historical gold price movements and the unprecedented nature of the current rally, comparing it to past economic cycles.
Risk Management: Investors are advised to be cautious in the current market environment, avoiding overleveraging and considering the intrinsic value of gold as a stable asset.
Transcript
Gold is trading at record high levels, 4064 as we record this. This is absolutely unprecedented. I'm not going to call it insane, but it is a little crazy, isn't it? The S&P 500 is also rallying, trading at all-time highs. Silver's about to touch $50 and the US dollar is showing some strength. Is that just short-term? Is it are we in an everything bubble? Is this the global meltup everybody has been warning us or predicting? So, I've invited Gary Wagner. He's the publisher and the brain behind the gold forecast and I'm looking forward to getting his prediction on what is happening in the gold market. Are we in an asset class by by itself? Should we take it all together? Is it an everything bubble or is gold behaving completely differently than maybe some of the other uh asset classes out there, bond market for example. So before I switch over to my guest, hit that like and subscribe button. Helps us out tremendously. And did I mention it's free? Doesn't cost you a thing. So why not do it? Gary, it is great to welcome you back on the program. It's good to see you again. Mahalo. >> Mahalo. It is great to be here. And what what an exciting time to be a gold analyst. I don't know after people see my numbers, you'll think I'm crazy because I underestimate it or crazy because I'm not going uh too aggressive. But yeah, this is history in the making and we're we're witnessing it. We're not a part of it, but here to report it, at least analyze it. Yeah, >> I'm a part of it. I own some. So, I'm I'm part of it. I consider myself a part of the movement here, Gary. >> You know, in that way, okay, I am a part of it, >> right? No, no, really appreciate we we'll get to your price targets here in a second, but we got to set the scene a little bit. Um, we haven't spoken in a little while, but gold has moved tremendously higher. Like I'm not even I'm I'm out of adjectives for to describe the rally in gold without sounding completely l like a lunatic here. But describe it for us like as of August 20 was I I think it was August 22nd Jerome Paul's speech all of a sudden floodgates opened and gold just rallied. Like how do you see it? What is your assessment here? >> I mean it is a very interesting time. We can compare this to different periods in time, but we have never witnessed gold accumulate such a strong advance, price advance in such a short compressed period of time. I mean, virtually we were at $3,000 not that long ago. We were at $2,000 um in March of 2024. And you know, we broke 4,000 on a closing basis. Of course, I'm talking about December futures, not spot, but I would venture that even spot has broken that key and important uh psychological round number. >> What What is driving gold right now? I'm trying to analyze it a little bit. Um, I I just mentioned to you before hitting the record button, Bloomberg's got a headline out saying gold is topping 4,000 fueled by the US government shutdown. And I said like, well, I think the US government shutdown doesn't have a lot to do with what we're seeing right now. Would you agree or disagree with that statement? >> Well, as we talked about just before we uh started the interview, there's a number of factors. And if I was a professor giving a multiplechoice answer, is it the Fed? Is it the current economy? Is it the GDP? Is it the current administration? And at the bottom, it's got e all of the above. I have to check all of the above because it's a combination of factors. While we still have geopolitical problems all over the world, uh a huge one in Gaza and Israel, that kind of went off the radar. How often is Ukraine and Russia's conflict uh in the 24-hour news cycle? It just isn't, but it's there. Um it's all of the things that have created this perfect storm this among this combination of various things whether it's the Fed the economy the administration and this is in the United States if you're in Europe you're going well what's going on with France uh there's a changing of the guards in Japan so there is a lot of things at play but ultimately Ely, I think the strongest contributor and we can look at that in a second on a chart is fiat currencies themselves and the governments that print and distribute them are accumulating huge deficits and those deficits are making any given currency whether it's euro, Swiss Frank, dollar making that a little less valuable. because it is just paper. Now, it's good paper. It's got cotton in it and other things, but it is fiat. And that's the key. If you're a country that has huge debt, and we we're in the trillions, um, and that debt is either stable or growing. In other words, it's not contracting. you're going to have the currency move lower when you compare it to other currencies. And that's what the dollar index is. Now, when you pair it against gold, gold is so much more stable than the other currencies because intrinsically there is value that countries, cultures, people have accepted for tens of thousands of years. Gold is one of those items that any civilization or most civilizations have agreed has intrinsic value a lot more than say dirt. And so because of that uh gold has stood the test of time. And the the illustration I've used for years is if we go back to the early 1900s or 1850 and I've got a $20 coin, a gold piece, and a $20 bill, and I've got them in my hand. Back in 1850, they pretty much had the same buying power. But as a fiat currency gets devalued, what happens is gold stays flat and it's the currency that moves around rather than it being gold that's moved from 2000 to 3000. It has a lot to do with the dollar moving from a much higher valuation to lower. >> No, absolutely. like the I I was going to make a joke about single pied paper and uh you know duplied paper as well but uh um no couldn't fit it in anymore. You you moved too far off. That's why I was mentally stuck there for a second, Gary. Um but I also hinted at the everything rally that we're seeing right now uh in in my intro, Gary. And is gold an asset by itself or should we bundle it in terms of like just what we're seeing in the terms of price performance with the S&P 500 uh with Bitcoin? Should we throw them in the same bucket or are we doing it uh an unfair or are we being unfair here? No, it's it's not unfair to take an asset and Bitcoin is a digital asset, but it's an asset nonetheless or a share of equity, a stock, and that's a percentage ownership in a company. Uh those all are universally between countries accepted as having intrinsic value. And now we're doing we've decided, okay, we're going to pair these. And now it is simply a matter of what's gaining value and what's losing value relative to what it's paired against. In our case, we're looking at gold paired against the dollar. >> Yeah, abs. Absolutely. So maybe we'll we'll stay on the dollar for a second since you brought that up. It's one asset class we haven't touched on yet. Um dollar is showing some strength here. Um, and maybe we can take a look at the chart here in a second as well, but dollar is showing some strength and my bra pragmatic mind says, well, there's a shutdown in the US. The government is shut down. Why is the dollar rallying? And uh, I'm curious what your take on that, Gary, is I'll bring it up here on the screen, but what do you make of the movement of the dollar here? Well, the US dollar has really nothing to do with um the strength of one economy versus another or actually excuse me it does it has relative strength when you compare it to the euro or the Swiss. But when we look at a longer term chart, and this is a short-term chart, and if you look at this top 109.634 back in January of this year, and at its low, the dollar came down to 96. So, we've got a 14% drop in the dollar index. And the dollar index is simply an index in which they compare the unit a US dollar against a basket of currencies which the euro has the greatest weight but the Swiss Frank uh and I believe there's a total of seven of them. So that's what we're looking at. This is not a chart of the buying power but it kind of illustrates the point here. you would figure, okay, you had a more buying power than you did when it dropped down. But it's comparing one fiat currency to a basket of other fiat currencies relative, and that's what this dollar index is showing us that the dollar is falling quicker than the other currencies. Can >> Can I jump in real quick, Gary, because a question popped into my head just based on something you've mentioned earlier. The Japanese yen, we've seen a government shakeup. Um in Japan the GG uh the the Japanese bonds are rallying as well. Um or the yields yields are dropping. Bonds are railing. Yield no yields are going higher. Bonds are dropping. That's I always confuse the two. And uh but the Japanese yen massive or massively devalued against the US dollar. Is that what we're seeing right now? Is this more or less just a Japanese yen move? Um and and we're trying to interpret too much into it. I think that is a component. Um, but we've been in the industry of looking at markets and giving our opinion for decades. Both of us have. And I look at some of the the the very well-known, very successful traders. and think what you want about his politics, but the team that uh George Soros put together continues to fund his philanthropy, the money he gives to charity. And um the key is is that the dollar itself will always have a value against the yen or the euro. But the index itself is a collection of many currencies and so it gives us a good sense of the US economy versus the other economies in the world and that's the way that I look at it. So when we look at a dollar chart, we're looking at what that dollar can buy in goods and services relative to what the euro, the Swiss Frank, and and the British pound and the other currencies that encompass the dollar index. >> Yeah, I don't want to make this a currency discussion, but Japanese yen is about 13%. So maybe we can actually discount sort of the move that that we've seen coming out of Japan here uh in in this rating. So, um, G Gary, we need to talk gold. Uh, we need to talk, we need to talk about the gold chart and what you're seeing. Like, you need to help me. I wouldn't say make sense of it because I can read what's what's happening, but you need to maybe put it into practical terms. We need to let the chart speak here, Gary. >> Well, and and it speaks loudly. Um, very very loudly. Let me just I don't need anything but this chart really. So, let me hide any partial studies that I might have on this. When you look at how gold has moved, and here we're we're looking at a very long term. This is back to 2000. And realize that for years, and my my data is going to run out before the pricing runs out. In other words, I've only got data on this till 1975. But for years, the dollar itself, as it relates to an ounce of gold, it was gold's p buying power that you wanted to look at and what you could buy from a an ounce of gold or a gold coin. And at one time they were considered equal. And so we've seen it run from, you know, the 300s in that area. for many years it was sitting at $20 for over a hundred years. Um and so we've seen it move and when we look at different periods of time here is a point in which it moved from 100 up to 700. That's a huge move. But the retracement itself I would venture to say I could put a Fibonacci retracement up but I would think that 50% is somewhere here. So, we're probably anywhere between 60 and 70% of a retracement. In other words, it the gold moves from a dollar up to 700 and then comes back down to 300. So, there's still a pretty big rise from 100 to 300, but it you saw a pretty steep correction. And we can go through periods of time in which we've witnessed gold. The one of the biggest moves of course was back in uh 2005 678 and that's when we watched it move from 300 and we all remember this at least I do. I'm sure you do. You could what were we doing when gold first broke above $1,800 per ounce? Well, I thought personally from 18 to,900 it's most likely going to 2500 and that's what a lot of analysts thought and then we watched it get whacked back down. It basically lost almost half of the value. Here's 2,000. But when we look at what's going on now, meaning the speed at which gold has accelerated from about 1,800 in October of 2023 beyond 4,000, if you were interviewing me a year ago and you asked for my forecast and I said, "Well, I or even like two years ago and I said, well, I think it's going to go to $4,000." uh when it was trading down here, you would have thought I kept drinking the poison. I' I've I've taken the crazy saw, so to speak. >> And this is one of the most dynamic, if not the most dynamic move I've ever seen, which is October 2022 at $1600 per ounce, and it breaks above $4,000 per ounce. Nobody that I know uh had this on their radar in terms of what a huge huge move uh gold has what what a huge move in gold has unfolded. I get tongue t uh tongue tied. Uh, my words are hard to spit out because when you look at this, you can just tell this is not usual activity. And you don't have to be a an analyst or a market technician to look at this move that occurred over a short period of time and had such a huge impact in terms of the price. And so what we're witnessing is not the incredible burst of gold. Turn it upside down. And what we're witnessing is the incredible devaluation of fiat currencies. And that's what looking at gold moved from 1,600 in October of 2022 to above $4,000, the first time in history. If that's what I was professing 10 years ago, I think that would be my last appearance on sore financially. and and I doubt there'd be many out there that would interview me unless they wanted to put a cracken pot on uh prior to putting a real analyst on. >> You know, we we always like contradictory views. So, we we always have given you like every six months. Maybe you wouldn't have had you on quarterly, Gary, but maybe every six months to see what the crazy man from Hawaii has to say, right? You know, >> um but that's said like when you flip the chart around, so where is zero? So, let's assume the fiat currencies all devalue or we'll probably never hit zero because we always kick the can down the road. But how close to zero can we get? And then we flip it around again. Where is that on the current scale? >> Again, zero with the dollar is a theoretical component. It's not going to go to zero because the currency is looked at and respected and utilized for trade between governments, for corporations, for individuals. We pay our taxes in dollars here in the US. Um, there's intrinsic value and there always will be because we can take that fiat currency. I wish I would have had one of my ounces in a and a currency bill to to hold up. But there's always going to be value as long as I can take that currency, pay my bills, uh, feed my family, and and do the things that we all need to do, pay our mortgages and whatnot to move on from month to month in society. And so, you're never going to see the dollar go to a theoretical zero. It can't because that would mean that you can't buy anything with it. You can't utilize it to pay bills. uh that it has no intrinsic value and uh on the bill it would say in God we trust but not this currency. You'd have to change the uh the uh sayings that go on the currencies themselves. But we utilize it because there is an acceptance that it has value just like gold does or any other asset. That's what composes a stock price. When you think about it, a company like Google, any company, you've got what we call book value in the industry. In other words, if you take all of the components, uh how much land they own, what what kind of product are they producing, what does it cost them, how many of those widgets or what services, how how much money did they take in uh marketing and selling that product or service. And so there's always going to be in intrinsic value and a share of stock that can theoretically go to zero because there might be a time when that company is insolvent and if it's insolvent that single share is worthless. Um but the dollar is the medium in which we barter or deal with commerce and it is a an accepted means of transferring wealth back and forth of doing business. I mean it's just ingrained as a part of our life. So what we want to do when we look at a move like this you're really see if we can pull that up. you're really looking at this move from 114 and we can go back in time um but just to illustrate my point when we look at the dollar index here it is at 89 and here it is at 113 and so we're kind of relatively in the middle of the last of the last decade's value of the dollar index in terms of buying buying power or as it relates to other currencies buying power. And that it's just basic economics 101. There's always going to be a value of a fiat currency as long as we can utilize that currency um to forward our pursuits, whether it's to to buy food, to stay alive, uh to accumulate wealth. And it's a lot simpler than many economists make it out to be. It's very very there's not much gray area in the value of a currency. There's there's no gray area because the chart and the value uh tell you whether it's going up or down based upon um the supply and demand. >> Fair enough. Fair enough. Gary, like how is is it possible to read the chart right now to get an accurate reading based on the momentum and maybe based on the irrationality that we're potentially seeing in this market right now? If you look at the short term in gold, where where do you see some support? Where do you see um maybe some ceilings? Like help us understand where this move is headed because my head is spinning. >> Everyone's head is spinning. Kai, look at it this way. Let's take away what we know is real time data and look at moves in gold where it would accumulate a huge price difference of 100 uh dollars per ounce of gold up to 700. Then a multi-year correction beginning in what is that 80? Yeah. Yeah. Yeah. 1980 down to the beginning of the bottom at the beginning of the century. So August 2001 and then it spikes very very hard and you get some kind of a point in which it blows off steam. Let's say we call it a correction. And so here it peaks out at 1900 and this is the big bull run everyone remembers middle of August uh starting in 2010 really starting wherever you want to put this cursor but topping at 1900 and then for a period of time and I remember this quite well because this is right here 1800 is when I thought it was going to 2500 and I couldn't have been more wrong because It bounced around between 1900 and 1500 for the longest time and then it slowly sold off and then this move is exceedingly strong, but it's only at 2,000. We still don't have a clue. So, as a market technician, when I look at gold at $2,000 an ounce and I look historically, and there's no it's a record all-time record high, as a market technician, I've run out of tools because my tools looking at a chart is to compare this price historically to the last time that gold had that value, 2,000 an ounce. Guess what? there is no time because it's in record territory. And so then what we look at is things like momentum. How quickly did it get to 2000 and where did that rally really begin? And you can I'm going to say right around a thousand. So it basically doubled. But we can't compare it to anything because it's above the former all-time record high of 1,800. And so as a market technician, where where can I tell you it's going? I can look at fundamental data, which is what the Federal Reserve does. I can't control interest rates. They can and ascertain a basic scenario. What if? What if? What if? But the basic move that we're witnessing now, what would, if you would have asked me even two, three years ago, what scenario would take gold from $1,800 an ounce and cause it to break above $4,000. and you'd get a analyst with deer eyes in the window. I mean, it would just be a blank stare. I I I couldn't give you any kind of uh respectable answer because this move has I don't know, you know, now all all of the analysts are catching up. I mean, back in, let's even say 2020, 21, 22, 23. It wasn't that far of a stretch to go 16 to 30,000, but it was a stretch in that it had never been here before. And this is as parabolic of a move as you're going to get because depending on how I how tight I compress the screen, we've got almost a 90° straight up there. I mean, you don't even the other parabolic moves. There is a tacted the angle itself is not steep like this. Basically, a straight up price progression. And whenever you go to an all-time record high, if you've got nothing to compare it to, you have to turn away from the charts and look at what what is that value based on. And since it's paired against the dollar, then we're comparing it against things like the US economy and things of that nature. And so it's very difficult. And I mean when I look at and we'll get to it in a second, but when I look at uh the upgraded um forecast I have for year end, uh it's my third revision this year. I didn't come into the year going uh $4,000 gold. I don't know anyone that did. Um it caught many people by surprise except for those crazy ones that said gold's going to $10,000. going to go, right? Um, they now have a little bit more forecasting weight than the more conservative analysts such as you or me. >> Uh, yeah. No, it's un unprecedented territory. But Gary, what is your target? Where where are we going? We got about a minute and a half left. Where's our target? Where are we going? >> All right. Well, obviously, what are my tools right now? I can't compare it historically. So, I fall back to formulas that closely represent nature, which is why I'm a big fan of Fibonacci numbers, which is a sequence where you start with one and add it to one and you get two and then 2 + 1 equals three. Then you go five and all you're doing is summing it up. And then you look at the relationship between the difference between all of those numbers. And so that's where you get the 618 from the 38.2 and the 23. Those are all fractals of the basic blueprint I call it of nature that can be expressed mathematically. And Fibonacci did a really good job of doing it in a way that we could plug it into other things. So, it wasn't so abstract. And so, my targets right now originally were 3,800. Well, we can throw that one out the window. Right now, year on target is 4150 to let's say, and see, I'm already overexaggerating this number, 4,300. But if it hits here, I've got to upgrade that. In other words, my my target was 3,800. What am I going to do with that now? Uh that goes into the uh digital trash can. Um so right now you received any hate mail though for it. Did anybody send you hate mail for reaching your target? So >> the more aggressive they are, the more my uh subscriber base um loves my analysis. Are you kidding? >> Yeah. >> If I call for 5,000, they Okay, now he's getting sane. Now he's throwing out some real numbers. And now that number isn't that far away >> and wouldn't have been on most analysts radar a decade ago. >> Maybe one last question here, Gary. Where where do you see the downside risk? Um if gold were to correct tomorrow, where where do you see a floor? >> Well, let's look at it this way. How are you using gold? Um, my service uses it to trade with, but I always recommend that my subscribers buy physical and hold it in their home safe. You know, mine sits in a top drawer. Um, and then any big quantities will sit in the uh the bank vault because that's a little bit better protected and I don't need to look at all of my precious metals. Um, I can have a coin and a kilo of silver and I'm happy. Um, if it's physical, in other words, you're not, you know, my physical gold is going to end up going to my kids and and God willing, I never have to to liquidate it to use it for bills. I don't have to liquidate it. I'm not going to move it somewhere else because I've allocated a certain percentage of my portfolio into gold and silver uh as that safe haven component of my assets. Now, I trade stocks and this and that, but for your physical gold and silver, you don't need to worry about it if you're not going to sell it. Um, so if it's at 4,000 and when it does drop, it could easily drop. And if we just look at this leg of the rally from 33 to 4700, so a $350 drop, only takes it down so far. And that's still above these former record levels. If it's physical, buy it. Like the old um uh who is the pitch man? Set it and forget it guy. the the Ronco uh set it and forget it. Buy it and keep it. Forget about it. I mean, what's your risk? Your risk is if you do need to use that asset to pay for bills or do something that you hadn't foreseen and the timing is wrong, you could be holding on to gold that has an average price of this and you have to sell it for that. But if you're buying physical gold, the way I believe uh consumers should do it, which is allocate a certain percentage over the year into that hard assets and continue to buy an ad. Well, when are you going to sell it? Buy an ad. >> I'll get you a good price for it. Now I'm okay. I'm keeping it myself. What are you going to do with it? I'm going to buy more an ad. Um, and then eventually it's going to go to my kids and hopefully they'll do the same thing. They won't liquidate it uh to buy a limousine or a fancy car, hopefully they're successful enough that if they want a fancy car, they continue to do the right thing and allocate a certain percentage to physical accumulation of precious metals. I've been a hardcore advocate of that all of my life. Uh my grandfather was a gold trader in Hungary and it's in my blood. There's a reason that I focus I I became a commodity broker in 1983 but I gravitated towards and there's a lot of commodities that we traded and followed uh specifically the S&P 500 because it deals with stocks and that's dynamic but I always believed you need to put a percentage of your portfolio the assets you're putting away for rainy day or uh to build wealth uh into the precious metals. >> Absolutely. >> And when you do it, you buy it, you store it, and you forget about it. >> Literally >> forget about it. Seriously. No, but you know, there's some traders out there. Just just be cautious out there. We're unprecedented territory. Um, watch what you're doing. Don't overlever, of course. So, I think those are some some parting words we we can leave our audience with. Gary, it's always great to have you on. It's always great to get your perspective on what what is happening in the gold space. uh from a chart perspective, bit of a rhetorical question because if our audience doesn't know where to find you by now, um and I'm not sure what they've been doing all their life, but where where can they find more of your work, Gary? >> Well, thank you. Uh the gold forecast1word.com is our website in which uh premium members will view a daily video and my report. Uh you can read reports on kitco.com uh Monday through Friday. It's a written report but the whole package meaning my charts uh my v video video presentation along with my daily letter is available uh to premium subscribers but for those that want to check me out or check out our service they can go to the gold forecast.com and if it's I believe over two weeks old the videos become public domain we we pull them off of our uh private server and put them onto YouTube, so anybody can watch it. And you can watch I've got more than in excess of 10 years of videos, I think 3,000 >> in which I've been doing a video Monday through Friday since 2009. So, you can spend a good amount of time just looking at historical videos I've produced to get an idea of was I right or wrong or to verify the track record that I publish. Well, he says he did so much. Well, you could say anything. Well, here's the videos. And if you look at the day we sold it and look at the video on that day, I better mention in that video that we got stopped out. We pulled profits. If I don't, you really know an easy way. I'm a shyer. And if I do, I I get some cred. >> That's the easiest way to review my work. >> And there's a lot of AI that helps us out double factchecking you now these days as well, Gary. So, you better be careful. really appreciate it. Thank you so much for joining us, Gary. It's always great to have you on. And everybody else, thanks so much for watching. As you can see, I'm I'm on the travel setup. I'm traveling right now. Uh exciting times here in the mining space. I do love the color of that curtain behind me, though. I might have to get something like that myself uh because it matches the store financially color. So, really, really like it. But let me know what you think. How are you positioned? How are you playing the gold space right now? How are you invested? Are you still invested? Uh are you are you letting the good times roll? let me know. Put it down below in the comments. We'll read every one of them. And I just appreciate you being here. Thanks so much. Hit that like and subscribe button and take care out there. [Music]
$4,000 GOLD: The Everything Bubble or Fiat Collapse? | Gary Wagner
Summary
Transcript
Gold is trading at record high levels, 4064 as we record this. This is absolutely unprecedented. I'm not going to call it insane, but it is a little crazy, isn't it? The S&P 500 is also rallying, trading at all-time highs. Silver's about to touch $50 and the US dollar is showing some strength. Is that just short-term? Is it are we in an everything bubble? Is this the global meltup everybody has been warning us or predicting? So, I've invited Gary Wagner. He's the publisher and the brain behind the gold forecast and I'm looking forward to getting his prediction on what is happening in the gold market. Are we in an asset class by by itself? Should we take it all together? Is it an everything bubble or is gold behaving completely differently than maybe some of the other uh asset classes out there, bond market for example. So before I switch over to my guest, hit that like and subscribe button. Helps us out tremendously. And did I mention it's free? Doesn't cost you a thing. So why not do it? Gary, it is great to welcome you back on the program. It's good to see you again. Mahalo. >> Mahalo. It is great to be here. And what what an exciting time to be a gold analyst. I don't know after people see my numbers, you'll think I'm crazy because I underestimate it or crazy because I'm not going uh too aggressive. But yeah, this is history in the making and we're we're witnessing it. We're not a part of it, but here to report it, at least analyze it. Yeah, >> I'm a part of it. I own some. So, I'm I'm part of it. I consider myself a part of the movement here, Gary. >> You know, in that way, okay, I am a part of it, >> right? No, no, really appreciate we we'll get to your price targets here in a second, but we got to set the scene a little bit. Um, we haven't spoken in a little while, but gold has moved tremendously higher. Like I'm not even I'm I'm out of adjectives for to describe the rally in gold without sounding completely l like a lunatic here. But describe it for us like as of August 20 was I I think it was August 22nd Jerome Paul's speech all of a sudden floodgates opened and gold just rallied. Like how do you see it? What is your assessment here? >> I mean it is a very interesting time. We can compare this to different periods in time, but we have never witnessed gold accumulate such a strong advance, price advance in such a short compressed period of time. I mean, virtually we were at $3,000 not that long ago. We were at $2,000 um in March of 2024. And you know, we broke 4,000 on a closing basis. Of course, I'm talking about December futures, not spot, but I would venture that even spot has broken that key and important uh psychological round number. >> What What is driving gold right now? I'm trying to analyze it a little bit. Um, I I just mentioned to you before hitting the record button, Bloomberg's got a headline out saying gold is topping 4,000 fueled by the US government shutdown. And I said like, well, I think the US government shutdown doesn't have a lot to do with what we're seeing right now. Would you agree or disagree with that statement? >> Well, as we talked about just before we uh started the interview, there's a number of factors. And if I was a professor giving a multiplechoice answer, is it the Fed? Is it the current economy? Is it the GDP? Is it the current administration? And at the bottom, it's got e all of the above. I have to check all of the above because it's a combination of factors. While we still have geopolitical problems all over the world, uh a huge one in Gaza and Israel, that kind of went off the radar. How often is Ukraine and Russia's conflict uh in the 24-hour news cycle? It just isn't, but it's there. Um it's all of the things that have created this perfect storm this among this combination of various things whether it's the Fed the economy the administration and this is in the United States if you're in Europe you're going well what's going on with France uh there's a changing of the guards in Japan so there is a lot of things at play but ultimately Ely, I think the strongest contributor and we can look at that in a second on a chart is fiat currencies themselves and the governments that print and distribute them are accumulating huge deficits and those deficits are making any given currency whether it's euro, Swiss Frank, dollar making that a little less valuable. because it is just paper. Now, it's good paper. It's got cotton in it and other things, but it is fiat. And that's the key. If you're a country that has huge debt, and we we're in the trillions, um, and that debt is either stable or growing. In other words, it's not contracting. you're going to have the currency move lower when you compare it to other currencies. And that's what the dollar index is. Now, when you pair it against gold, gold is so much more stable than the other currencies because intrinsically there is value that countries, cultures, people have accepted for tens of thousands of years. Gold is one of those items that any civilization or most civilizations have agreed has intrinsic value a lot more than say dirt. And so because of that uh gold has stood the test of time. And the the illustration I've used for years is if we go back to the early 1900s or 1850 and I've got a $20 coin, a gold piece, and a $20 bill, and I've got them in my hand. Back in 1850, they pretty much had the same buying power. But as a fiat currency gets devalued, what happens is gold stays flat and it's the currency that moves around rather than it being gold that's moved from 2000 to 3000. It has a lot to do with the dollar moving from a much higher valuation to lower. >> No, absolutely. like the I I was going to make a joke about single pied paper and uh you know duplied paper as well but uh um no couldn't fit it in anymore. You you moved too far off. That's why I was mentally stuck there for a second, Gary. Um but I also hinted at the everything rally that we're seeing right now uh in in my intro, Gary. And is gold an asset by itself or should we bundle it in terms of like just what we're seeing in the terms of price performance with the S&P 500 uh with Bitcoin? Should we throw them in the same bucket or are we doing it uh an unfair or are we being unfair here? No, it's it's not unfair to take an asset and Bitcoin is a digital asset, but it's an asset nonetheless or a share of equity, a stock, and that's a percentage ownership in a company. Uh those all are universally between countries accepted as having intrinsic value. And now we're doing we've decided, okay, we're going to pair these. And now it is simply a matter of what's gaining value and what's losing value relative to what it's paired against. In our case, we're looking at gold paired against the dollar. >> Yeah, abs. Absolutely. So maybe we'll we'll stay on the dollar for a second since you brought that up. It's one asset class we haven't touched on yet. Um dollar is showing some strength here. Um, and maybe we can take a look at the chart here in a second as well, but dollar is showing some strength and my bra pragmatic mind says, well, there's a shutdown in the US. The government is shut down. Why is the dollar rallying? And uh, I'm curious what your take on that, Gary, is I'll bring it up here on the screen, but what do you make of the movement of the dollar here? Well, the US dollar has really nothing to do with um the strength of one economy versus another or actually excuse me it does it has relative strength when you compare it to the euro or the Swiss. But when we look at a longer term chart, and this is a short-term chart, and if you look at this top 109.634 back in January of this year, and at its low, the dollar came down to 96. So, we've got a 14% drop in the dollar index. And the dollar index is simply an index in which they compare the unit a US dollar against a basket of currencies which the euro has the greatest weight but the Swiss Frank uh and I believe there's a total of seven of them. So that's what we're looking at. This is not a chart of the buying power but it kind of illustrates the point here. you would figure, okay, you had a more buying power than you did when it dropped down. But it's comparing one fiat currency to a basket of other fiat currencies relative, and that's what this dollar index is showing us that the dollar is falling quicker than the other currencies. Can >> Can I jump in real quick, Gary, because a question popped into my head just based on something you've mentioned earlier. The Japanese yen, we've seen a government shakeup. Um in Japan the GG uh the the Japanese bonds are rallying as well. Um or the yields yields are dropping. Bonds are railing. Yield no yields are going higher. Bonds are dropping. That's I always confuse the two. And uh but the Japanese yen massive or massively devalued against the US dollar. Is that what we're seeing right now? Is this more or less just a Japanese yen move? Um and and we're trying to interpret too much into it. I think that is a component. Um, but we've been in the industry of looking at markets and giving our opinion for decades. Both of us have. And I look at some of the the the very well-known, very successful traders. and think what you want about his politics, but the team that uh George Soros put together continues to fund his philanthropy, the money he gives to charity. And um the key is is that the dollar itself will always have a value against the yen or the euro. But the index itself is a collection of many currencies and so it gives us a good sense of the US economy versus the other economies in the world and that's the way that I look at it. So when we look at a dollar chart, we're looking at what that dollar can buy in goods and services relative to what the euro, the Swiss Frank, and and the British pound and the other currencies that encompass the dollar index. >> Yeah, I don't want to make this a currency discussion, but Japanese yen is about 13%. So maybe we can actually discount sort of the move that that we've seen coming out of Japan here uh in in this rating. So, um, G Gary, we need to talk gold. Uh, we need to talk, we need to talk about the gold chart and what you're seeing. Like, you need to help me. I wouldn't say make sense of it because I can read what's what's happening, but you need to maybe put it into practical terms. We need to let the chart speak here, Gary. >> Well, and and it speaks loudly. Um, very very loudly. Let me just I don't need anything but this chart really. So, let me hide any partial studies that I might have on this. When you look at how gold has moved, and here we're we're looking at a very long term. This is back to 2000. And realize that for years, and my my data is going to run out before the pricing runs out. In other words, I've only got data on this till 1975. But for years, the dollar itself, as it relates to an ounce of gold, it was gold's p buying power that you wanted to look at and what you could buy from a an ounce of gold or a gold coin. And at one time they were considered equal. And so we've seen it run from, you know, the 300s in that area. for many years it was sitting at $20 for over a hundred years. Um and so we've seen it move and when we look at different periods of time here is a point in which it moved from 100 up to 700. That's a huge move. But the retracement itself I would venture to say I could put a Fibonacci retracement up but I would think that 50% is somewhere here. So, we're probably anywhere between 60 and 70% of a retracement. In other words, it the gold moves from a dollar up to 700 and then comes back down to 300. So, there's still a pretty big rise from 100 to 300, but it you saw a pretty steep correction. And we can go through periods of time in which we've witnessed gold. The one of the biggest moves of course was back in uh 2005 678 and that's when we watched it move from 300 and we all remember this at least I do. I'm sure you do. You could what were we doing when gold first broke above $1,800 per ounce? Well, I thought personally from 18 to,900 it's most likely going to 2500 and that's what a lot of analysts thought and then we watched it get whacked back down. It basically lost almost half of the value. Here's 2,000. But when we look at what's going on now, meaning the speed at which gold has accelerated from about 1,800 in October of 2023 beyond 4,000, if you were interviewing me a year ago and you asked for my forecast and I said, "Well, I or even like two years ago and I said, well, I think it's going to go to $4,000." uh when it was trading down here, you would have thought I kept drinking the poison. I' I've I've taken the crazy saw, so to speak. >> And this is one of the most dynamic, if not the most dynamic move I've ever seen, which is October 2022 at $1600 per ounce, and it breaks above $4,000 per ounce. Nobody that I know uh had this on their radar in terms of what a huge huge move uh gold has what what a huge move in gold has unfolded. I get tongue t uh tongue tied. Uh, my words are hard to spit out because when you look at this, you can just tell this is not usual activity. And you don't have to be a an analyst or a market technician to look at this move that occurred over a short period of time and had such a huge impact in terms of the price. And so what we're witnessing is not the incredible burst of gold. Turn it upside down. And what we're witnessing is the incredible devaluation of fiat currencies. And that's what looking at gold moved from 1,600 in October of 2022 to above $4,000, the first time in history. If that's what I was professing 10 years ago, I think that would be my last appearance on sore financially. and and I doubt there'd be many out there that would interview me unless they wanted to put a cracken pot on uh prior to putting a real analyst on. >> You know, we we always like contradictory views. So, we we always have given you like every six months. Maybe you wouldn't have had you on quarterly, Gary, but maybe every six months to see what the crazy man from Hawaii has to say, right? You know, >> um but that's said like when you flip the chart around, so where is zero? So, let's assume the fiat currencies all devalue or we'll probably never hit zero because we always kick the can down the road. But how close to zero can we get? And then we flip it around again. Where is that on the current scale? >> Again, zero with the dollar is a theoretical component. It's not going to go to zero because the currency is looked at and respected and utilized for trade between governments, for corporations, for individuals. We pay our taxes in dollars here in the US. Um, there's intrinsic value and there always will be because we can take that fiat currency. I wish I would have had one of my ounces in a and a currency bill to to hold up. But there's always going to be value as long as I can take that currency, pay my bills, uh, feed my family, and and do the things that we all need to do, pay our mortgages and whatnot to move on from month to month in society. And so, you're never going to see the dollar go to a theoretical zero. It can't because that would mean that you can't buy anything with it. You can't utilize it to pay bills. uh that it has no intrinsic value and uh on the bill it would say in God we trust but not this currency. You'd have to change the uh the uh sayings that go on the currencies themselves. But we utilize it because there is an acceptance that it has value just like gold does or any other asset. That's what composes a stock price. When you think about it, a company like Google, any company, you've got what we call book value in the industry. In other words, if you take all of the components, uh how much land they own, what what kind of product are they producing, what does it cost them, how many of those widgets or what services, how how much money did they take in uh marketing and selling that product or service. And so there's always going to be in intrinsic value and a share of stock that can theoretically go to zero because there might be a time when that company is insolvent and if it's insolvent that single share is worthless. Um but the dollar is the medium in which we barter or deal with commerce and it is a an accepted means of transferring wealth back and forth of doing business. I mean it's just ingrained as a part of our life. So what we want to do when we look at a move like this you're really see if we can pull that up. you're really looking at this move from 114 and we can go back in time um but just to illustrate my point when we look at the dollar index here it is at 89 and here it is at 113 and so we're kind of relatively in the middle of the last of the last decade's value of the dollar index in terms of buying buying power or as it relates to other currencies buying power. And that it's just basic economics 101. There's always going to be a value of a fiat currency as long as we can utilize that currency um to forward our pursuits, whether it's to to buy food, to stay alive, uh to accumulate wealth. And it's a lot simpler than many economists make it out to be. It's very very there's not much gray area in the value of a currency. There's there's no gray area because the chart and the value uh tell you whether it's going up or down based upon um the supply and demand. >> Fair enough. Fair enough. Gary, like how is is it possible to read the chart right now to get an accurate reading based on the momentum and maybe based on the irrationality that we're potentially seeing in this market right now? If you look at the short term in gold, where where do you see some support? Where do you see um maybe some ceilings? Like help us understand where this move is headed because my head is spinning. >> Everyone's head is spinning. Kai, look at it this way. Let's take away what we know is real time data and look at moves in gold where it would accumulate a huge price difference of 100 uh dollars per ounce of gold up to 700. Then a multi-year correction beginning in what is that 80? Yeah. Yeah. Yeah. 1980 down to the beginning of the bottom at the beginning of the century. So August 2001 and then it spikes very very hard and you get some kind of a point in which it blows off steam. Let's say we call it a correction. And so here it peaks out at 1900 and this is the big bull run everyone remembers middle of August uh starting in 2010 really starting wherever you want to put this cursor but topping at 1900 and then for a period of time and I remember this quite well because this is right here 1800 is when I thought it was going to 2500 and I couldn't have been more wrong because It bounced around between 1900 and 1500 for the longest time and then it slowly sold off and then this move is exceedingly strong, but it's only at 2,000. We still don't have a clue. So, as a market technician, when I look at gold at $2,000 an ounce and I look historically, and there's no it's a record all-time record high, as a market technician, I've run out of tools because my tools looking at a chart is to compare this price historically to the last time that gold had that value, 2,000 an ounce. Guess what? there is no time because it's in record territory. And so then what we look at is things like momentum. How quickly did it get to 2000 and where did that rally really begin? And you can I'm going to say right around a thousand. So it basically doubled. But we can't compare it to anything because it's above the former all-time record high of 1,800. And so as a market technician, where where can I tell you it's going? I can look at fundamental data, which is what the Federal Reserve does. I can't control interest rates. They can and ascertain a basic scenario. What if? What if? What if? But the basic move that we're witnessing now, what would, if you would have asked me even two, three years ago, what scenario would take gold from $1,800 an ounce and cause it to break above $4,000. and you'd get a analyst with deer eyes in the window. I mean, it would just be a blank stare. I I I couldn't give you any kind of uh respectable answer because this move has I don't know, you know, now all all of the analysts are catching up. I mean, back in, let's even say 2020, 21, 22, 23. It wasn't that far of a stretch to go 16 to 30,000, but it was a stretch in that it had never been here before. And this is as parabolic of a move as you're going to get because depending on how I how tight I compress the screen, we've got almost a 90° straight up there. I mean, you don't even the other parabolic moves. There is a tacted the angle itself is not steep like this. Basically, a straight up price progression. And whenever you go to an all-time record high, if you've got nothing to compare it to, you have to turn away from the charts and look at what what is that value based on. And since it's paired against the dollar, then we're comparing it against things like the US economy and things of that nature. And so it's very difficult. And I mean when I look at and we'll get to it in a second, but when I look at uh the upgraded um forecast I have for year end, uh it's my third revision this year. I didn't come into the year going uh $4,000 gold. I don't know anyone that did. Um it caught many people by surprise except for those crazy ones that said gold's going to $10,000. going to go, right? Um, they now have a little bit more forecasting weight than the more conservative analysts such as you or me. >> Uh, yeah. No, it's un unprecedented territory. But Gary, what is your target? Where where are we going? We got about a minute and a half left. Where's our target? Where are we going? >> All right. Well, obviously, what are my tools right now? I can't compare it historically. So, I fall back to formulas that closely represent nature, which is why I'm a big fan of Fibonacci numbers, which is a sequence where you start with one and add it to one and you get two and then 2 + 1 equals three. Then you go five and all you're doing is summing it up. And then you look at the relationship between the difference between all of those numbers. And so that's where you get the 618 from the 38.2 and the 23. Those are all fractals of the basic blueprint I call it of nature that can be expressed mathematically. And Fibonacci did a really good job of doing it in a way that we could plug it into other things. So, it wasn't so abstract. And so, my targets right now originally were 3,800. Well, we can throw that one out the window. Right now, year on target is 4150 to let's say, and see, I'm already overexaggerating this number, 4,300. But if it hits here, I've got to upgrade that. In other words, my my target was 3,800. What am I going to do with that now? Uh that goes into the uh digital trash can. Um so right now you received any hate mail though for it. Did anybody send you hate mail for reaching your target? So >> the more aggressive they are, the more my uh subscriber base um loves my analysis. Are you kidding? >> Yeah. >> If I call for 5,000, they Okay, now he's getting sane. Now he's throwing out some real numbers. And now that number isn't that far away >> and wouldn't have been on most analysts radar a decade ago. >> Maybe one last question here, Gary. Where where do you see the downside risk? Um if gold were to correct tomorrow, where where do you see a floor? >> Well, let's look at it this way. How are you using gold? Um, my service uses it to trade with, but I always recommend that my subscribers buy physical and hold it in their home safe. You know, mine sits in a top drawer. Um, and then any big quantities will sit in the uh the bank vault because that's a little bit better protected and I don't need to look at all of my precious metals. Um, I can have a coin and a kilo of silver and I'm happy. Um, if it's physical, in other words, you're not, you know, my physical gold is going to end up going to my kids and and God willing, I never have to to liquidate it to use it for bills. I don't have to liquidate it. I'm not going to move it somewhere else because I've allocated a certain percentage of my portfolio into gold and silver uh as that safe haven component of my assets. Now, I trade stocks and this and that, but for your physical gold and silver, you don't need to worry about it if you're not going to sell it. Um, so if it's at 4,000 and when it does drop, it could easily drop. And if we just look at this leg of the rally from 33 to 4700, so a $350 drop, only takes it down so far. And that's still above these former record levels. If it's physical, buy it. Like the old um uh who is the pitch man? Set it and forget it guy. the the Ronco uh set it and forget it. Buy it and keep it. Forget about it. I mean, what's your risk? Your risk is if you do need to use that asset to pay for bills or do something that you hadn't foreseen and the timing is wrong, you could be holding on to gold that has an average price of this and you have to sell it for that. But if you're buying physical gold, the way I believe uh consumers should do it, which is allocate a certain percentage over the year into that hard assets and continue to buy an ad. Well, when are you going to sell it? Buy an ad. >> I'll get you a good price for it. Now I'm okay. I'm keeping it myself. What are you going to do with it? I'm going to buy more an ad. Um, and then eventually it's going to go to my kids and hopefully they'll do the same thing. They won't liquidate it uh to buy a limousine or a fancy car, hopefully they're successful enough that if they want a fancy car, they continue to do the right thing and allocate a certain percentage to physical accumulation of precious metals. I've been a hardcore advocate of that all of my life. Uh my grandfather was a gold trader in Hungary and it's in my blood. There's a reason that I focus I I became a commodity broker in 1983 but I gravitated towards and there's a lot of commodities that we traded and followed uh specifically the S&P 500 because it deals with stocks and that's dynamic but I always believed you need to put a percentage of your portfolio the assets you're putting away for rainy day or uh to build wealth uh into the precious metals. >> Absolutely. >> And when you do it, you buy it, you store it, and you forget about it. >> Literally >> forget about it. Seriously. No, but you know, there's some traders out there. Just just be cautious out there. We're unprecedented territory. Um, watch what you're doing. Don't overlever, of course. So, I think those are some some parting words we we can leave our audience with. Gary, it's always great to have you on. It's always great to get your perspective on what what is happening in the gold space. uh from a chart perspective, bit of a rhetorical question because if our audience doesn't know where to find you by now, um and I'm not sure what they've been doing all their life, but where where can they find more of your work, Gary? >> Well, thank you. Uh the gold forecast1word.com is our website in which uh premium members will view a daily video and my report. Uh you can read reports on kitco.com uh Monday through Friday. It's a written report but the whole package meaning my charts uh my v video video presentation along with my daily letter is available uh to premium subscribers but for those that want to check me out or check out our service they can go to the gold forecast.com and if it's I believe over two weeks old the videos become public domain we we pull them off of our uh private server and put them onto YouTube, so anybody can watch it. And you can watch I've got more than in excess of 10 years of videos, I think 3,000 >> in which I've been doing a video Monday through Friday since 2009. So, you can spend a good amount of time just looking at historical videos I've produced to get an idea of was I right or wrong or to verify the track record that I publish. Well, he says he did so much. Well, you could say anything. Well, here's the videos. And if you look at the day we sold it and look at the video on that day, I better mention in that video that we got stopped out. We pulled profits. If I don't, you really know an easy way. I'm a shyer. And if I do, I I get some cred. >> That's the easiest way to review my work. >> And there's a lot of AI that helps us out double factchecking you now these days as well, Gary. So, you better be careful. really appreciate it. Thank you so much for joining us, Gary. It's always great to have you on. And everybody else, thanks so much for watching. As you can see, I'm I'm on the travel setup. I'm traveling right now. Uh exciting times here in the mining space. I do love the color of that curtain behind me, though. I might have to get something like that myself uh because it matches the store financially color. So, really, really like it. But let me know what you think. How are you positioned? How are you playing the gold space right now? How are you invested? Are you still invested? Uh are you are you letting the good times roll? let me know. Put it down below in the comments. We'll read every one of them. And I just appreciate you being here. Thanks so much. Hit that like and subscribe button and take care out there. [Music]