What if I told you that I could predict The price of gold Yeah I mean I'd be lying but I can give You something to help That's better than nothing So here's something to think about kind Of a strange thing Whenever we see small drops and gold Price whether that's daily or weekly Trading people tend to grab that Trend And extrapolate it they think that gold Is going to continue dropping I just Take a spin through the comments from Any of last week's videos I put out You're going to see people saying They're waiting for gold to hit sixteen Hundred dollars and then they'll jump Back in now I'm not picking on anyone Some people probably do have solid Rationale there maybe they have Significant positions maybe they aren't In any rush to add to them but most People see that short-term slope and They just draw out a straight line going At that same angle and that sentiment That price is going down or that tends To spread pretty quickly with no good Reason we really shouldn't even be Watching daily price fluctuations unless We're trading gold which very few of us Here actually are and those who do trade They pay attention to other things they Have charts that show moving averages That smooth out these fluctuations they
Show actual trends now the thing that we All need to understand is what's Actually affecting this stuff and I Don't think that I've ever heard anyone Explain it I've heard people say things Like gold price tracks inversely to the Dixie but that is not a historical Correlation it's a relatively new thing It makes me wonder if the people making Those comments understand what they're Repeating to begin with so we're going To try to fix that at a base level we All know about supply and demand Gold's A commodity it operates the same as any Other when more people are buying and Supply is limited price goes up now a Lot of things affect demand political Unrest Central Bank policies retail Buying we all get that but here's where This gets really important for any of us Trying to guess at where the price of Gold is going and what's relatively new Is that the strength of the US dollar And U.S treasury yields they have direct Impact on price fluctuations last week It's a really good example of this Effect we saw pce numbers come in higher Than expected and we saw the Federal Reserve minutes show that some of the Members wanted to consider a 50 basis Point rate hike now both of those data Points were bad for gold because they Were good for the US dollar now the Reason that this is happening now but it
Hasn't really been a good historical Indicator is that bond yields just have Not been exciting interest rates haven't Been high enough to make them attractive But that's changed there are two big Reasons here that the correlation Between the price of gold and the Strength of the US dollar is so direct Now the first is that since gold is Priced in U.S dollars when the US dollar Is strong it can make gold more Expensive for buyers using other Currencies higher prices decrease demand Causes prices to fall now the opposite Is true as well when the US dollar is Weak well gold is cheaper for buyers Using other currencies lower relative Prices increase demand that pushes the Price back up in terms of US dollars the Second has to do with treasury yields a U.S treasury bond yield is a key Benchmark for Global interest rates so When treasury yields rise other Investments get more attractive because They offer higher returns when treasury Yields fall while gold is more Attractive in that traditional role as a Safe haven asset because the competing Options are now underperforming There are a lot of factors in play with Gold price but the US dollar its impact Is the one that's causing so much of the Fluctuation right now so if you're Trying to forecast any kind of trend
With this stuff well one way to get a Gut check on your thought process is to Just ask yourself if the reverse is Likely with the US dollar if you think Gold is going to fall 13 percent down to Sixteen hundred dollars without any huge Shift otherwise without any shift in Demand well do you think that the Strength of the U.S dollar is going to Gain 13 what's the offset Now this is the logic behind the pivot That we talk about when interest rates And treasury yields are cut while the Lower Returns on interest-based Investments get less attractive that Means a gold demand will go up so if you Find yourself getting caught up in Short-term price movement and it's Really easy to do that when you have YouTube channels just jumping on every Price move just keep the bigger picture In mind ask yourself if demand is Changing if the USD exchange rate is Changing if interest rates and treasury Yields are changing because even though None of us has a completely clear Picture into what's actually happening With those figures we at least know that Those changes are slow and they're Controlled the FED is not going to Change something suddenly like a two Percent rate increase central banks are Not going to suddenly reverse buying Policies as to whether or not gold
Prices will continue falling Definitely possible I'm actually assuming that we'll see Buying opportunities leading up to June But I'm not expecting a 13 drop in price As far as current price goes whether Gold is actually on sale right now while I had 1812 that was the closing spot Price on Friday we're still ahead of Where gold was at in mid-December just a Few months before we're also still ahead Of the 200-day moving average so the run Up to 1940. that was the Oddity that was The breakout anyone trading on that run Well they're the ones that got beat up And anyone buying on it while they were Buying on a high I actually sold some Gold to help consolidate some of what I Have I'm gonna come back to that now I Wasn't really sure that it was high but It felt pretty likely and last week's Drop to 1820 makes it feel like a better Time to buy but we could still see it Go Lower current price still above the 200 Dma I think the 200 dma is like 1784 Right now maybe I'm off slightly Regardless gold could go to 18.50 it Could drop into the 1700s and none of That would be a change to long-term Trend If the spot price of gold fell into the 1600s though and some of those people Were saying 1600 flat well that would Require a very big gain in the strength
Of the US dollar maybe a big Geopolitical Improvement that would make Central banks and Retail buyers no Longer interested in Gold well Do we think that's likely I'm going to leave the conclusions to You this is just meant as insight into Where prices are going it's not going to Help but daily or weekly moves none of Us know where pce numbers are going to Come in CPI numbers are going to come in But it should help a trend spotting and It should help with peace of mind And that's it for this one so let us Know what you think of the current price Range is that 1750 to 1850 a reasonable Trading band or do you think that we're Going to see a continued drop let us Know and then while you're in the Comments be sure to hit that like button If you found any of this interesting be Sure you're subscribed with Notifications turned on if you'd like to See more on the topic and if you're Still here thanks again for watching I Always appreciate your time Take care [Music]
