Gold is a currency. It is the oldest means of exchange in the world. Long before there were dollars, euros, pounds, or any other world foreign exchange instruments in circulation today, there was gold. Thousands of years ago, gold was a currency, a store of wealth, and a symbol of affluence. Gold is a unique commodity as it is a metal and an exchange instrument.
Central banks around the globe validate the role of gold in the financial system. Many governments hold the yellow metal and report their ownership monthly in statistics released by the International Monetary Fund. Some countries, like China and Russia, do not report their stockpiles of the precious metal, as they consider the data a state secret and matter of national security.
Over the past years, countries have been net buyers of the precious metal. The decline of fiat currencies has thrust the gold market into a bullish trend that started after the turn of this century.
London is the hub of the international gold market. Ironically, the British government sold half their gold stash at prices below $300 per ounce back in 1999-2001. Gold broke out of its long-term consolidation pattern in June 2019 when the price rose above technical resistance at $1377.50 per ounce. Over the past year and two months, the price rose to a high that was $685.50 above the breakout level on the continuous futures contract on the COMEX division of the Chicago Mercantile Exchange.
The Direxion Daily Junior Gold Miners Index Bull 2X Shares (NYSEARCA:JNUG) often outperforms the price action in the gold market on the upside.
Chairman Powell said that the inflation rate target is an average rather than a line in the sand
At the annual Jackson Hole conference, which went virtual this year because of the pandemic, Fed Chairman
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