The beginning of Ramadan Kareem and happy new year.
Prepare a cup of coffee… and take the first sip before you start reading this article… because this article will require you to be logical and impartial… and to read with me the secrets between the lines and the ideas that follow.
Gold rises to $160
– From the bottom of Friday 03/01/2024 to the peak of Friday 03/08/2024, prices increased $156 = 7.7% [اختصارا لاحقا سوف أذكر الجمعة الأولى والجمعة الثانية]
We heard many ideas and reasons that tried to give a guise of logic to the price movement. Some tried to ride the wave of rise and present their idea that they expected the rise, but they forget to try to explain it on the ground now. So let us quickly review these ideas.
– Geopolitical tensions: If they were the reason, it would have been logical to see a rise as well…but oil prices actually declined from the first Friday’s peak to the second Friday’s low -$3.25 = -4.0%
– Negative: The dollar fell in the same period by -200 points = -1.9%. And whoever believes that this decline is a logical reason, he should review the picture above, which shows previous declines, some of which were at much greater rates, and we did not witness this madness from
– China and Russia’s purchases of gold reserves: If this is the reason, then why did we not witness crazy rises in the Asian and European markets… and that the crazy rises only came in the American markets… and literally it can be said that the Asian and European markets did not participate in the madness of the American markets and were content with the role of spectators.
– The performance of the American economy is bad and the future is worse: If this is also the reason, it would be logical that this hypothetical badness would be reflected in stocks in the first place…but on the contrary, we are seeing historical performance of stock prices and positive historical financial data for American companies…so where is the negativity?
Backward questions
gold
· Why did silver prices not react in the same way… since gold and silver achieved a peak in the month of 08/2020, which we will consider as the beginning of the measurement… and then, as in the first picture, gold rose to the highest point by $120 = 5.8%… while silver fell from This peak reaches the highest price last Friday at -$5.25 = -17.5%!!
· Gold is seen as a safe haven. Increased demand for safe havens economically means abandoning high-risk assets, such as stocks, for example. But we are witnessing historic rises for stocks. So where is the logic?
· Purchases by the People’s Bank of China, which many assume are the driver of prices.. Although I answered them in the points above.. but the opposite question here.. Did you know that China added from 11/2022 until the end of 02/2024 to gold reserves 9.9 million ounces? As for the month of 02/2024, which some call crazy purchases of gold by the People’s Bank of China, the bank added only 390 thousand ounces, meaning that the percentage for the month of February did not reach 4% of the total that China added during the last period.
· Let us continue with the People’s Bank of China… calculating the average or monthly rate of 9.9 million ounces ÷ 16 months = 620 thousand ounces per month… meaning that the February purchases that are being blamed were 40% less than the average purchase of the previous months!!
What about global gold investment funds?
– International gold investment funds are considered the most specialized and in-depth in the sea and details of gold
From the above chart, it seems clear that gold investment funds have begun to abandon their positions [الخط البياني باللون الأبيض] Almost since the beginning of interest rate hikes
– It continued to abandon its positions again in 2023
It also continued to abandon its positions from the beginning of 2024 until now
Not only that, but it has now returned to the levels of gold possession that it was at before the start of the pandemic at the beginning of 2020.
– Not only that…but he noticed the process of harmony and parallelism between… [الخط البياني باللون الأصفر] And between the levels of holding and concentration of gold prices for gold investment funds
– Some chaos began at the beginning of 2023… but it returned to making sense after that
The chaotic chaos officially began in the last quarter of 2023… and this chaos continues to increase and expand in 2024, and it is in its clearest form now.
· According to the estimated data, general inflation is expected to stabilize at the same previous reading of 3.1%… in exchange for a decline in core inflation from 3.9% to 3.7%… and before you take it for granted that it will affect the positivity of gold prices and their rise, read the following points.
· A year and a half ago from now… specifically 17 months ago, in the inflation data released on October 10, 2022, we witnessed a lot of chaos.
· At that time, the previous inflation reading was 6.3%, while the estimated reading was 6.5%.. Surprisingly, the actual reading was 6.6% at the time.. What is the logical reaction, in your opinion, to gold prices? Yes, the thoughts that were whispered in your mind are correct. The logical reaction is that the dollar rises and gold falls
· But Do’s response at the time was that gold fell in a very short initial reaction…and then prices rose $40 from bottom to top = approximately 2.5%!!
· If you thought then that gold alone had an adverse reaction for another reason… then you are wrong… because Jones, as you saw in the picture above, also had an adverse reaction… and rose by only 1550 points!!
· Of course, he will not miss this diamond opportunity of chaos and joined them to achieve 660 points as well!!
· And before you tell me this reaction is normal… I will ask you to compare the following data and the reaction of gold, the Dow Jones, and the Nasdaq… as the following data was the opposite of the previous data… literally the opposite… inflation fell from 6.6% to 6.3% and was lower than The estimated reading as well… meaning that inflation returned from where it rose in the previous month… but they all had the same reaction in rising and rising as well.
· That is, in contradictory data…the reaction was identical in height!!
· And if, after all of the above, you still think that what happened was logical… I bring to you the statement of one of BlackRock’s senior employees on the day of the first data, where he said, “This day was the most difficult day in his professional life.” This employee has 30 years of experience in the markets. Money and trading and he considered it the most difficult day…which means that this was the most chaotic day for him…because the difficulty comes from chaos and not logic.
The bottom line
– Now, after all of the above, do you, ladies and gentlemen, consider that what happened between the first and second Friday is logical, or is it chaos?
– If someone is trying to flex his virtual muscles [التي هي موجودة في الواقع الافتراضي فقط] And to delude you into thinking that what happened is reality, logical, expected, and correct… and that you alone did not understand what happened. [وربما يقول لك أن غيث أبوهلال مثلك لم يستوعب ما حصل] He told him that the Asian and European markets also did not understand what happened.
– And increase it by a hair beta… The international gold investment funds also did not understand or react to what happened
– International gold investment funds literally apply the famous economic rule: in times of prosperity, invest in stocks and bonds, in times of inflation, invest in gold, in times of recession, invest in cash. [النقد] Meaning that in a recession even gold loses its luster
– Now, after all of the above… and based on the current data [دون توترات أو أحداث مفاجئة] Levels of 3000, in my opinion, are a fantasy… Levels of 2500, in my opinion, are a fantasy… Levels of 2300, in my opinion, are very unlikely.
– And if you were to ask me whether 2300 is closer or the 2000 level… my opinion is that the 2000 level is much closer to the 3000 level.
– Has breaking the 2100 level and then breaking the 2000 level become a fantasy? My opinion is that it is coming in 2024 and sooner than they think
– If you believe that lowering interest rates has only one option, which is rising gold prices, and there is no other option… I invite you to remember that gold prices are achieving new historical peaks, and the 5.5% interest rate is the highest it has been in a long period of time.
– Conclusion: Do not just take my personal opinion.. Re-read the article, points and details.. and form your own point of view on the matter.
– Details of the gold and silver analysis for this week in the video attached below
We will follow up with you on price fluctuations in the upcoming articles, and for more rapid and continuous updates, you can follow
My account on the X platform [تويتر]
@GhaithAbohlal
Where you can interact through comments at any time
A reminder in the margin of the article:
. Trading markets always fluctuate in their direction, and depend on a lot of data and news, in addition to major banks and market makers who often direct the market, even contrary to reality and logic sometimes.
. The opinions and ideas above are a summary of the analysis, and they are not direct recommendations, but rather advice for followers, taking into account that no one is able to profit continuously from trading operations, even large investors.
. Therefore, we always strive to reduce losses and increase profits in accordance with the analysis and point of view of the method of trading prices, by applying many combined and intersecting analysis methods to try to reach the best results.
. We have to work hard, and God is the Grantor of success.
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