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What's driving the recent gold rally?


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Looks like a few things are going right for gold. Gold was going sideways at $1700, then there was a big jump to $1800 (about 2 weeks back) and today we are almost at $1900. But, what is driving the price up? I note 2 things that need to be mentioned


a) Bitcoin falling and people exiting the crypto market
b) Inflation fears


Anything else that I am missing?

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9 minutes ago, sellerstacker said:

Looks like a few things are going right for gold. Gold was going sideways at $1700, then there was a big jump to $1800 (about 2 weeks back) and today we are almost at $1900. But, what is driving the price up? I note 2 things that need to be mentioned


a) Bitcoin falling and people exiting the crypto market
b) Inflation fears


Anything else that I am missing?

I think you have it mainly covered, although I would have put the two points in the opposite order.

Chards

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1 hour ago, sellerstacker said:

Looks like a few things are going right for gold. Gold was going sideways at $1700, then there was a big jump to $1800 (about 2 weeks back) and today we are almost at $1900. But, what is driving the price up? I note 2 things that need to be mentioned


a) Bitcoin falling and people exiting the crypto market
b) Inflation fears


Anything else that I am missing?

Another possiblity is the implementation of Basel III.  This is aimed at regulating the banks and and will have implications for the LBMA.  It is due to come into force at the end of June in Europe and on  1/1/22 in the UK.  According to this video it should tighten up on banks' ability to deal in unallocated gold.  It suggests that banks may be forced out of their current short positions in the LBMA, and therefore, getting back to your question, banks may be starting to buy gold to begin covering their short positions... maybe!

 

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1 hour ago, BackyardBullion said:

I definitely feel it's the inflation fear and for me that has certainly been the driving force over my accumulation of gold

😉

PXL_20210525_092652466.jpg.3ebd23e7dab7666ccafc29dd9ae73efd.thumb.jpg.e5120fa2d05760c8211575a26d374d2a.jpg

lovely bit of treasure there matey

It does not matter how slowly you go so long as you do not stop.

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9 hours ago, BackyardBullion said:

I definitely feel it's the inflation fear and for me that has certainly been the driving force over my accumulation of gold

😉

PXL_20210525_092652466.jpg.3ebd23e7dab7666ccafc29dd9ae73efd.thumb.jpg.e5120fa2d05760c8211575a26d374d2a.jpg

Is this ready for the next BYB video coming to a YouTube near you!!! 😉

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13 minutes ago, Coolsmp said:

Is this ready for the next BYB video coming to a YouTube near you!!! 😉

Maybe....

Today at 5pm you might find out!

Visit my website for all my Hand Poured Silver: http://backyardbullion.com

And check out my YouTube channel 

https://www.youtube.com/backyardbullion

 

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11 hours ago, Zhorro said:

Another possiblity is the implementation of Basel III.  This is aimed at regulating the banks and and will have implications for the LBMA.  It is due to come into force at the end of June in Europe and on  1/1/22 in the UK.  According to this video it should tighten up on banks' ability to deal in unallocated gold.  It suggests that banks may be forced out of their current short positions in the LBMA, and therefore, getting back to your question, banks may be starting to buy gold to begin covering their short positions... maybe!

 

 

Will this really have much effect on the ground?

I don't profess to know much about it to be honest. From the few scant details I've picked up, it seems the can keeps getting kicked down the road with regards to actually implementing it. But also some commentators on YouTube (so pinch of salt etc.) seem to be under the illusion that the paper game will just be transferred from banks to hedge funds. Basically as the rules change, the players will adopt a new approach to how they play it. It is after all a lucrative market, or so it seems.

In an ideal world one would hope that Basel III would flush out the paper inflation, but I guess only time will tell.

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I'd sum it up as general weakening of the dollar and an anticipated gloomy economic outlook due to the pandemic.

It'll be interesting to see if it reaches last years high and break the $2k again and maybe stay there for a bit longer.

I doubt many people can come up with convincing reasons for it to fall at the moment!

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On 28/05/2021 at 04:04, SilverStorm said:

Just purchased a 1 oz gold maple leaf earlier this afternoon, and I had to pay an extra $70+ over what I paid last month for the same thing.  So yeah I’m hoping the prices stay low(ish) so that I can stack BYB’s suggested 1kg of gold!  👀

1 kg of gold is a great target, I feel gold is too cheap at the moment.  The US government reserve is only valued at 11 billion, Jeff Bezo could buy that 17 times over with his own wealth.  Even when you look at the US total gold reserves and it’s questionable just how much they really have, around 8000 tons valued only at 290 billion in comparison Apple are valued at 2 Trillion!  Gold value in 2021 is looking like it’s out of touch with the failing fiat economic system.  

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