Gold’s Rise Clears Oliver’s $1,825 Triggering the Next Bull Run

Michael Oliver has categorically stated that we need to see a weekly gold price close this quarter above $1,825 in order for the next gold bull market to begin. That was achieved on Nov. 12, 2021. The chart above left shows the monthly average price of gold (red line) since 1995. But that chart is very deceptive. The chart above on your right is a more accurate picture of the current price of gold because it measures gold against the amount of money created out of thin air by the Fed. As you can see, the real price of gold based on the money supply is at a level on a par with the 1970s when gold traded less than $40/oz and in the early 2000’s when gold traded at around $250 per ounce.

On the basis of inflation alone, which the Fed is now losing control of, gold should surge dramatically higher. But another factor will come into play on January 3, 2022 when Basel III requirements will force all western banks to stop placing futures and options contracts on the asset side of their balance sheets due to concerns stemming from the 2008 financial crisis. The illustration on your right reveals how bullion banks have denied true price discovery for physical gold by smashing the quoted price of the yellow metal downward through massive futures and option sales of gold.  More paper gold is traded than physical gold at a ratio of 15,000 times to one, and major bullion banks have used this mechanism to suppress the price of gold and drive it dramatically lower when natural market forces would take it higher. That is a signal to the masses not to exchange paper for gold. But the ability of banks to manipulate the quoted price of gold will end under Basel III on January 3, 2022. That, along with inflationary forces, should enable gold to start a massive new bull market in 2022.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.