Persistent elevated gold price is a warning for US Dollar hegemony
dcarr
Posts: 8,782 ✭✭✭✭✭
I don't always like to hear what Mohamed El-Erian has to say, but I have to admit that I generally have to agree with it. His commentary is usually the most astute observations out there. In this latest article he points out that while there is still no real substitute for the US Dollar internationally, countries (such as the "BRICS" members) are increasingly building "pipes" around the US Dollar.
"Gold rally should be ‘flashing yellow in Washington’ as international investors shed USD":
https://kitco.com/news/article/2025-03-20/gold-rally-should-be-flashing-yellow-washington-international-investors
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Comments
Gold and silver will benefit greatly from a coming sovereign debt crisis that is reaching a boiling point in Europe. Look for the EU to believe a major war will sidetrack the crisis it faces. Their current public statements are showing signs of this. This will drive PM prices through the roof. Get gold (and/or silver). Get a Costco membership and credit card and buy cheap as the products become available.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
Washington IS creating the yellow light.
Knowledge is the enemy of fear
Haven't read the linked article yet, but that is what my gut feeling is.
We are in a sea-change time in many areas, no telling what we are going to evolve to. Perhaps the Fed system will be changed... perhaps not. I do not expect the status quo will remain the same. Prepare accordingly, and place your bets as one sees fit. (my crystal ball remains cloudy... perhaps I will try 'chicken bones')
It will probably take the end of the USD as global reserve currency to restore silver's historical perception as "money". It's viewed as quasi "money", as evidenced by the now over 100-1 gold-silver ratio.
silver is likely to never again be considered "money." Its future demand lies with industrial use and perception that it is a safe haven investment.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
I can see that, but, then why do so many here think it's so underpriced and should be worth so much more?
Palladium and platinum are intermittently referred to or inferred as "precious metals" on this forum too, when both are less of a "precious metal" than silver, having no history as "money".
Prices aren't the result of a formula, inventory stock, or mining output.
I consider silver relatively "underpriced", but in an unprecedented historical asset, credit, and debt mania (yes, the one we are in now), there are no "safe havens" in the sense most people think of it.
Silver is not subject to default, but its low unit value also makes it impractical to own in large or very large quantities. The spreads are wider vs. gold, it's too heavy or more expensive to transport in large quantities, and storage and insurance costs are higher too.
He has a bias. At the end of the day the dollar will weaken if there is a loss of confidence. Put the technicals aside. Gold price is higher as a store of value for institutions, central banks and personal, not just because the dollar is weakening.
Hello to all. I dont think any great changes are going to be made to the International system. The fragility of the market has just been shown and who wants chaos. Already order is beginning to be brought back to the negotiating table. Anyway, what do I know ?
All I know is that a system thats been in place for 80 years and has rebuilt the world from war will be resistant to great change. Again, Hello to everyone.
Over the last two years I was bashing the prior administration's economic policy causing a weakening dollar as reflected in the significant rise in PM prices. Those prices continue to rise dramatically. Is that a reflection of a lack of confidence in the economic policy of the current administration or is something else at play?
I do see the rise in the price of the yellow metal as a caution signal but a warning signal about what? A trade war, a bullets and bombs war, another pandemic?
The article says this system, with the dollar as the reserve currency, is resistant to change. But this historic change in the U.S. administrations hasn't changed the direction or even slowed the increase in the gold price. Why?
Anyone that has been around for a long time knows our times is unprecedented in our lifetime. Back when I was in my twenties i knew that gold represented a good store of value should the "xxx" hit the fan. Well, I think it has hit the fan!!!
I will hold onto that gold until I am ready to die. I suspect that many other people are like me. It is insurance for us against chaos. Physical gold... Ahhh.... Helps me sleep at night. Several thousand years as a store of value is enough for me. The paper that govts issue is no substitute for it...
The more the GSR increases the less silver can be considered money. Silver and gold have not been money since they were disconnected from physical money.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
Gold is higher because it takes more dollars to buy it. Sounds like a weakening dollar, at least when measuring what it will buy and not when comparing it to other weakening currencies (DXY - dollar index).
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
No, gold is not used as a payment method, but the price certainly isn't based upon its relative utility or scarcity.
Gold's price is based on fear and uncertainty in the currency it is priced in. The reason to turn to gold is because of its scarcity and the fact that it can't be printed at will. Silver's price not so much: it's price is mostly based on its use as a production commodity.
FWIW gold is now being explored as a payment method between BRICS nations as they seek to disconnect themselves from what they view to be a currency that in recent years has been turned into a political weapon. Whether their view is correct or not is not something to discuss in this forum.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards
Somebody forgot to ask Silver to the party . Again.
Loves me some shiny!
silver is not gold, don't expect it to act as such.
Gold has a world price entirely unaffected by accounting games between the Treasury and the Fed. - Jim Rickards