Gold market remains stuck in consolidation below $1,850. Still, one analyst says the long-term bullish pattern of the precious metal remains firmly in place.
Byron King: This is a scandal!
Agora Financial editor and precious metals expert Byron King gave an interview recently. The analyst says it’s only a matter of time before gold becomes a fundamental monetary metal once again. According to Byron King, as inflation spiraled out of control, consumers lost faith in fiat currencies. In addition, King notes that the situation may worsen as governments continue to create money from the air. In this context, the analyst comments:
Western currencies are mismanaged and abused by their own governments. This is a scandal.
“We didn’t clean up in the 2008 crisis and now we’re at the end of the road”
King says the problems consumers are currently facing can be traced back to the 2008 financial crisis. About 15 years ago, there was the worst financial crisis since the Great Depression. Meanwhile, the government and the Federal Reserve flooded the financial markets with money and liquidity to support the economy. The famous analyst makes the following assessment:
We had a bad recession back then, but it used to clean up all the mess from Augeas’ stables. Back then we had a very miserable time for a year or two. However, the powers did not want this. So they threw the box down the road. So guess what? We are at the end of the road.
Comments on key issues for gold: Recession, geopolitics and the dollar
With rising inflation and slowing growth, the world is now once again on the verge of another recession. King says the only solution is for politicians to spend more money. “This is how we got into this mess in the first place,” the analyst says.
But it’s not just consumers who are starting to distrust the US dollar. King states that the geopolitical landscape has changed due to the Russian invasion of Ukraine. From this, he notes, there are some sympathetic nations that question the role of the US dollar as the world’s reserve currency.
The US government and its Western allies used the US dollar as a weapon against Russia. cryptocoin.com As you can see from Turkey, it imposed harsh sanctions on Russia. However, King states that it is possible for these sanctions to backfire. It also notes that it could continue to affect global supply chains and increase inflation. King explains his views as follows:
The thing about weapons is that they must be destroyed. You fire a projectile, launch a rocket, or detonate a bomb; These weapons are destroyed after use. When you weaponize the US dollar, you risk exploding your currency. It’s okay to argue that what Russia did was terrible. But the move to arm the US dollar is irreversible. So the world is watching to see what happens next.
“Holding some gold will help preserve wealth”
King says he expects nations that are particularly friendly to Russia to begin reducing their exposure to the US dollar and US Treasuries and increase their gold holdings. Despite mounting difficulties, the US dollar held up extremely well. Also, it recently hit a 20-year high. But King notes that this is more about the weakness of other nations, such as Europe, than the strength of the US economy. The analyst uses the following statements:
The US dollar remains the cleanest soiled shirt in the laundry. But still dirty. But investors have other options. Everyone leaves the euro because Europe has no energy.
But according to King, gold remains a solid alternative to the US dollar. Moreover, the analyst says, investors are starting to understand this. In this context, he comments:
Gold price action is a testament to its historical value. The world is moving away from the US dollar. So holding some physical metal will help preserve wealth during this very turbulent time.
