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inflation is headed back up and this should be a much bigger problem for the markets than it was but the fact that we didn't really get a big sell off in gold gold is starting to hold up better now with hotter than expected inflation now eventually Gold's going to go up and up big with worse than expected inflation when the markets figure out that worse than expected inflation isn't bad for gold because it means the FED is going to fight harder to to beat inflation it's good for gold because it means the FED has already lost and is giving up the fight inflation one and it's going to move higher and higher and higher the gold market is excited as prices soar to new heights inching closer to a significant Milestone of $2,100 per ounce thus setting up a potentially game-changing week filled with substantial macroeconomic risks the market is experiencing its most impressive weekly gains since November a achieving a record high close and displaying over a 2% increase from the previous week The Surge began on Thursday as prices surpassed the initial resistance level of $2,50 an ounce following a Federal Reserve report indicating a mild increase in consumer prices Peter Schiff a prominent American stock broker is confident that gold will experience a substantial rise in value due to inflation rates exceeding expectations he believes that if inflation worsens the Federal Reserve will intensify its efforts to miate it which is favorable for gold prices since it implies the FED has essentially surrendered in its battle against inflation however some analysts caution that gold could face a critical test next week with the release of February's non-farm payrolls report and Federal Reserve chair Jerome Powell's testimony before Congress these events will undoubtedly influence Market sentiments and could alter the course of gold prices despite the optimism not all analysts are convinced that Gold's upward trajectory will persist even as the week Clos es with significant momentum Nikki Shields the head of metal strategy at MKS pamp posits that Gold's recent surge could be attributed to a prolonged period of consolidation she asserts that momentum may drive gold prices higher but the fundamental economic picture remains unchanged Peter Schiff emphasizes the recent rise in the personal consumption expenditures index which was expected to remain stable at 2.8% but unexpectedly Rose to 3% he views this as indicating increasing inflation rather than following the anticipated decline to 2% this suggests a potential uptick in inflation rates further supporting the case for higher gold prices let's delve into key moments from Peter schiff's interview with these video clips we got the GDP numbers this number came out on Wednesday this is the Q4 preliminary number and very close to consensus they were looking for 3.3 and we got 3.2 a problem and the gold market got hit a bit this day the gold stocks but more so because probably raising money for for the Bitcoin ETFs but the personal consumption expenditure index which is what the FED pays a lot of attention to for inflation That was supposed to come in at 2.8 which would have matched the prior quarters 2.8 instead it went up it came in at 3% we're supposed to be on a Glide path down to two well obviously we're not gliding down to two if we went up we gained altitude and we moved to three and in fact we're going above three maybe the the next uh the next quarter or maybe they'll revise this one so this shows that inflation is headed back up and this should be a much bigger problem for the markets than it was but the fact that we didn't really get a big sell-off in gold gold is starting to hold up better now with hotter than expected inflation now eventually Gold's going to go up and up big with worse than expected inflation when the Market's figure out that worse than expected inflation isn't bad for gold because it means the FED is going to fight harder to beat inflation it's good for gold because it means the FED has already lost and is giving up the fight inflation won and it's going to move higher and higher and higher I think what the markets did like is that the the inflation numbers that are in here the pce numbers came out out in line they weren't worse than expected now they weren't better than expected but they weren't worse they were looking for an increase in the pce for the month of.
three and they got. three uh year-over-year they were looking for up 2.4 and they got up to 2.4 and on the core they were looking for up point4 and they got up .4 and year-over-year core they were looking for up 2.8 and they got up 2.8 so the market celebrated in fact gold was down a few dollars as soon as this number came out it spiked up about 12 $12 $13 right away so it was like ah relief that inflation wasn't worse than we thought again this is the wrong reaction to the extent that inflation wasn't as bad as people thought that's actually bad for gold it's the other way around but again the markets are still not trading on that reality they're just trading the way these algorithms have been programmed to react to data points so they saw that the inflation number was in line it wasn't hotter and then there was a a rally and of course the gold stocks you know rallied strong because the number comes out an hour before the market so gold reacts because Gold's trading uh and then the Stock Market opens an hour later and we had a big move up in in in Gold stocks Peter Shi observes a noteworthy Trend among investors many of whom have been divesting their gold stocks in favor of investing in Bitcoin ETFs however He suggests that this tide could turn if gold prices Ascend again according to Andre dragos the head of research at Etc group there is a growing Divergence in global fund flows with increasing investment in Bitcoin compared to Gold dros believes this could be an early indication that Bitcoin could supplant gold as the primary store of value etf.com data from January 11th to February 14th reveals a considerable outflow from gold ETFs approximately $2.6 billion was withdrawn from the spyer gold shares which had assets under management of $58 billion at the start of 2024 similarly the I shares gold trust which had $26 billion in AUM at the beginning of the year saw approximately 57 million in outflows these figures indicate a notable shift in investment sentiment away from gold ETFs let let's get back to the interview a lot of liquidity came out of these gold stocks that's a big problem uh for Bitcoin going forward because what it really means is if gold takes off and to me it looks like you know liftoff is is close and all of a sudden the people who got out of these gold stocks want to get back in where are they going to get the money well they got to take it out of the Bitcoin ETFs see it's not like a lot of people sold their gold and bought Bitcoin because gold didn't go down what went down were the gold mining stocks and that makes sense that a lot of people have brokerage accounts and in those brokerage accounts they don't own gold they own gold mining stocks maybe they own physical gold outside of their brokerage accounts but they they bought gold stocks in their brokerage accounts to have a leverage play on gold and it hasn't been working out they saw these Bitcoin ETFs going up and they said hey let me get in on it well if all of a sudden gold takes off remember I I mentioned the downgrade of Newmont mining uh or the fact that they had bad earnings I forget it got downgrade yeah I think it got downgraded on Monday Monday or Tuesday there was a firm I forget the name they they downgraded the stock from a buy to a hold and a hold is Wall Street for sell basically they watched the price of numont Drop Like 40% more than that from its high a buy rating the whole way down and then all of a sudden near the lows they say well sell or hold it I mean you know what kind of advice is that I mean I bought more numont myself on the day of that downgrade and then it went lower and I bought more and I bought more again so I I I bought a bunch of Newmont personally uh during the week I mean I love to buy downgrades and I like to buy gold stocks when they're making 52e glowes right I'm getting the deal uh and especially when I connected the dots because I think the real reason for these big drops in Newmont is it's the biggest most liquid name that's the source of funds because as numont was getting killed the Bitcoin ETFs were popping they were going up 5 10% a day and and so that's where the money is coming from and I'm thinking this is a gift horse this is a great opportunity the people who are selling their gold stocks to buy these Bitcoin FS they're giving me a gift they're making a huge mistake the the other problem is going to be when these guys who really you know were in Gold stocks and they just lost confidence the The Firm that downgraded and I I forget the name it wasn't a big name that you would know when they downgraded it they said you know we're downgrading numont because we don't think there's much upside in the price of gold I we don't think it's going to go down but we don't really think it's going to go up and so we we don't really have a reason to buy numont they said in the downgrade that if their Outlook changes if the price of goal goes up and it looks like it's going to keep Rising well then they'll they'll upgrade the stock back to a buy well the problem is by the time that's the case the price will be much higher and so the people who sold it are going to be buying it back at a much much higher price uh than they got out but the problem's going to be if you sold your gold stocks and you bought any one of these Bitcoin ETFs and then we get a big move in the price of gold maybe it jumps $50 or $100 gold stocks jump 10 or 20% and all of a sudden people want in on these stocks aha see gold is now moving I want to buy these gold stocks let me just take some money out of my Bitcoin ETFs it's not going to work that way analysts from JP Morgan recently expressed their belief that a series of factors including expectations of a US rate cut and a weakening US dollar will Propel gold prices even higher according to Gregory sheerer the bank's head of base and precious metal strategy JP Morgan firmly believes that gold will experience a bullish medium-term forecast distinguishing it as the metal with the highest growth potential what potential impact could an upcoming US rate cut have on the gold market and how might this influence investor sentiment share your thoughts in the comment section if you like the video please subscribe to our Channel and remember to activate notifications by hitting the Bell icon your participation means a lot to us thank you
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