The Volatility Of The Gold Market Explained | Mark Moss

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Summary

➡ The price of gold has recently skyrocketed, breaking past old limits and reaching new heights. This isn’t just good news for those who invest in gold, but it’s also a sign of what’s happening in the financial markets and what might come next. The video explains why gold prices are rising, how this affects the wider financial world, and how investors can use this information to protect their investments and potentially benefit from these changes. The video also discusses how gold has been used as money for over 5000 years and how its price can indicate future events in the global financial system.
➡ The global economy is made up of real assets like land and buildings, and financial assets. Central banks and individuals can change their financial balance by buying real assets like property, gold, and bitcoin. China is buying a lot of gold, which is driving up its price, and this is a sign that they’re preparing for a decrease in the value of their currency. Bitcoin is also being seen as a safe asset, similar to gold, and both are being used as a way to protect against the loss of purchasing power due to the increase in the amount of money being printed by governments.
➡ The author believes that inflation will increase, as shown by the rising values of gold and bitcoin. They predict that this trend will become more noticeable in the next six months, leading up to the election. They plan to make another video explaining why they think this will happen. They also encourage viewers to comment, like, or dislike the video, and to subscribe to their channel.

Transcript

The gold price just exploded, taking out decades old resistance. And now it’s shooting higher into what we call price discovery. And while this is exciting for gold bug investors, it’s a much bigger deal than just what the price is doing. The big news is what this move is trying to tell us about the markets right now. More importantly, what’s coming next that we need to be prepared for.

So in this video, I’m going to break down the recent surge in gold prices. We’re going to analyze the factors driving this phenomenon. We’re going to explore the implications of this price movement on the broader financial markets. Look at practical advice on how investors can interpret these signs and adjust their investment strategies accordingly, and how I’m using this to safeguard my portfolio against potential market volatility and position myself to take advantage of these moves.

So let’s go. All right, welcome to the channel if you’re new. My name is Mark Moss. I make these videos to change the way you think about money because almost everything you learned is wrong and almost everything you see is, well, at best, confusing. So I try to take these complex subjects and make them easy, easy to understand and more importantly, actionable. And that’s what we’re going to do.

We’re going to take a look at gold. Now, gold has been around for millennia, it’s been money for over 5000 years. And it’s sort of this canary in the coal mine that sure, gold bugs love to see the price moving up, but more importantly, this canary in the coal mine is telling us what’s about to happen in the global financial system. So let’s break it all down. So first of all, the gold signal.

What is gold telling us? The price of gold telling us? I’ve been doing these chat GPT images, hopefully you like these. This is the gold signal right here. What is it telling us? Well, right now it’s telling us by showing that this breakout, that it’s abundantly clear here we have back to like 1995 in gold price. We can see we had this top right around 2011 is when we had the previous gold high.

We got back to this level, but now you can see we have clearly broken out above that trend line. All right, so this is what the gold price is telling us. Now, I like to look at it from multiple perspectives and if we look at this, we see it’s a much bigger deal. This goes all the way back to 1970, which of course, if you know WTF happened in 1971, it’s when we got off the gold standard and of course we shot to a new all time high here, and then we broke it here in 2011, and you can see just how high above that we are right now.

So this is a big move. It’s a commanding move, and it tells us there’s something big going on. More importantly, if you’re gold bug, it’s telling us there’s a secular bull market getting started or. Or what? We’d say it’s time to play game on. Meaning now that gold has broken over this level, it’s now in what we call price discovery, meaning there’s no resistance above it. So, in technical analysis, you look at support and resistance lines.

There’s nothing ahead. And so now we are just finding the next levels we’ll be supporting or finding new support and resistance levels. And so we are in price discovery. But like I said, we are in a secular bull market now. In bull markets, you buy dips. In bear markets, you buy bounces, or what we’d say rips. Okay? So that’s sort of where we’re at in this cycle. But let’s just dig in just a little bit deeper first so we can see that it’s not just the breakout that we want to pay attention to.

What we want to look at is we want to look at the gold price breakout in multiple time frames, daily, weekly, monthly, and even quarterly. But we want to see it in the size and the speed of the moves. All right? We want to see how dramatic it is. That’s why I like to show you the charts. And what we can see is this is a massive move right here.

But more importantly, the reason why I want to show you the charts is because look at these candles, right? So these. Each one of these are candles, as I’m sure you know. And this moved up in one, two, basically three candles. It had this massive, decisive move that was on the weekly. This is on the quarterly. Look at this move as well. So we sort of had this resistance range right here.

We just blew right past that in a single candle. And what does that tell us? This tells us it’s a very commanding, very, very decisive move that is going on here. Okay, so, as I said, that’s great for gold bugs, right? But what does this tell us about the bigger market? That’s what we want to get into now. To understand what gold is really telling us, we have to understand what its true purpose really is.

Why is it a monetary metal, and how is it being used? So the first thing we have to understand is balance sheet, right? A balance sheet is your assets, minus your liabilities equals your net worth, right? That’s the balance. The balance between assets and liabilities. Now, what we know is that gold is being used on the balance sheet. So, for example, if you own it in your personal portfolio, it’s on your balance sheet.

It’s in the asset column. Then you have your liabilities column, but it’s also being used by nations. Nations have been buying gold to build up their reserves, just like you. Hopefully, you have some savings. Nations also have mass amounts of savings. So where do they put those just like you? Lots of places. They put them into treasuries, right? They put them into gold, things like that. I’m going to break this down for you.

And what we can see here is that nations have been buying gold at a record rate. As a matter of fact, this goes back to 2010. And look at the amount of increase that nations have been buying gold at. Now, it’s no wonder why 2014, 2015, both China and Russia started to de dollarize, meaning they didn’t want to buy as many us treasuries as they had before. And then, of course, here was it around 2021, we had the trucker protest, and then Russia had their bank account seized.

I think that was right here about 2022. And the whole world was basically put on notice that money in the bank and money in us treasuries isn’t really safe. They could just be stolen anytime. And so the nations have been in this mad rush to buy more gold than any time in history. Now, we can see this. It’s pretty interesting to take a look at this. If we look at the nations that have actually been buying gold, which ones are they? Well, when China watched what happened to Russia, they thought, shoot, that could probably happen to us.

We should probably take some evasive maneuvers to make sure that doesn’t happen. Which is why you can see here, China is the largest buyer of gold by a long, long shot. Singapore is right here. Number two, Czech Republic. Number three, Iraq. Right here. Philippines, et cetera. No. United States. No. Canada. Right? They’re not buying it. And these nations down here, net sellers, Kazakhstan, Bolivia, Germany, are selling their gold.

Germany’s and a whole world are hurt because they’re deindustrializing their energy sector. That’s another story. But it’s important to understand how this is being made up. And here’s another chart that I think makes a lot of sense from my friends over at the bitcoin layer, Nick and Joe Consorti. Now, this is interesting. It’s concerning if you’re in the United States, or Europe. And what we can see here is that China, Russia, Japan and India are all adding to the gold.

But no us, no Canada. Why? Because they’re dealing with the US dollar. But why are they doing it? Okay. We have to understand the mechanism. Well, the reason why they’re adding gold to their balance sheet is because gold is real assets. What do I mean by real assets? Well, most of the economy is financialized. They’re financial assets. And if you understand what that means, that financial assets are debt obligations.

So, for example, your house, well, per Robert Kiyosaki, your house isn’t really an asset, but let’s say that a house or an apartment building is an asset, but you didn’t pay cash for it, you most likely got a loan for it. All right, so when that loan was created, the money was created into existence. The loan, the dollars that were created are debt instruments. They’re liabilities. And the loan itself is the asset, not the house.

The loan itself is the asset. So the central bank, the banks keep that financial obligation on their book, but they don’t have the real asset. The same with banks? The same with central banks. All right, so what we end up looking like is something like this. If you look at the global economy, we basically have, the global real economy is about a little less than 60% of the total assets that the central banks own.

All right, these are real assets. So these could be land, infrastructure, buildings, things like that. And then this, the red piece is the amount of financial assets. Now, in a balance sheet, you have assets minus liabilities and balance sheet. It’s supposed to somewhat balance out. But for you and I, we can offset this. We can change our balance by buying real assets like property, like real estate, like bitcoin, like gold.

But what do central banks do? Well, central banks need to do the same thing, which is why they’re buying gold. Okay, so now that you understand the mechanism of gold and how it’s used in balance sheets, let’s understand the signal that it’s telling us. Okay, so the first thing is, now that you understand that central banks are buying gold, so they actually have a real asset on their books.

Not just financial assets, not somebody else’s debt obligation, but a real asset, we can then take a look at China, because China is the one that’s pushing the price of the gold. Now, what is China doing that’s let it take over the price of the gold market and is driving things from here? Well, we can see a couple of things. So first of all, China has taken over gold’s price.

How have they done that? Well, exceptional strong gold demand from both the chinese central banks. So the central banks are buying a massive amount of gold and also the private sector. So it’s not just the central banks, it’s the citizens of China that are buying massive gold in massive quantity. Why? Well, they’re doing this. By doing this, they’ve taken control over the gold price from the west because the west isn’t buying any gold.

The US isn’t the US central bank, the Fed, the US government, they’re not buying gold. Most Americans aren’t buying gold. As a matter of fact, the gold ETF’s have been draining as the bitcoin ETF’s have been taking over. And so China has taken over all the demand. The price is driven by supply and demand. But down here is the most important piece. If the west, Canada, Us, et cetera.

If the west joins the chinese gold buying craze in fear of why? In fear of rate cuts and currency debasement. So what they’re saying is the reason why the nations and China central bank are buying massive amounts of gold is in fear of rate cuts and currency debasement. So the Fed talking about how many rates cut they’re doing this year. Well, the other nations of the world realize what’s happening.

Why would they want to continue to hold dollars when the government’s just print more of them? So knowing that they’re going to print more of them, there will be more debasement. They’re turning to gold. So that’s exactly what’s happening. Now we can see that it’s not just gold that’s telling us this. As a matter of fact, we can see my good friend Ronnie Sofferle put this chart together.

We can see that we have a twin peak going on right here. What are the Twin Peaks? This is bitcoin right here. And this is gold right here. So we can see that these two are moving very similar. Why? Well, it’s because bitcoin is digital gold. Bitcoin is gold 2. 0. Bitcoin is this new safe haven asset that a lot of people are going to. Now I get it.

People that are typically older like gold, because that’s what they’ve kind of known for a long time. People that are younger like bitcoin, but you can see how they’ve been moving together. As a matter of fact, we saw about a month ago, Larry Fink from Blackrock said that bitcoin is now a safe haven, which is why people buy gold, which is why central banks buy and buying gold.

And what we can see right here, I mentioned this earlier, but we can see that bitcoin is growing in market cap, catching up to gold. As a matter of fact, Goldman Sachs, JPMorgan, Citibank have all put out guidance saying that bitcoin will overtake gold. What we can tell here specifically, this is not about bitcoin or gold. This is that both of them are telling us there’s a problem coming.

Both of them are telling us that there’s a massive amount of debasement coming that steals the purchasing power of your money, and that people are rushing into this. And when I say people, I’m talking about central banks who know what’s going on now. When they debase the currency, your money buys less goods and services. You already know that. Or what the government tries to tell you is inflation, or prices going up.

Now, what has the definition of inflation versus hyperinflation? I recently did this interview with my friend Parker Lewis, the author of gradually, then suddenly, and we talked about this very subject right here. Now, hyperinflation has a technical definition. I believe it’s 50% inflation month over month. He said that he looks at hyperinflation is just when you start to notice the price differences. So it’s not like when I was a kid, that soda used to be $0.

50. It was like, I remember last year when that soda used to be fifty cents. And that’s sort of where we’re at. I remember just a couple years ago, gas was like half the price. I remember just a couple years ago, homes were half the price. I remember just a couple years ago, steak was half the price. So we’re starting to notice this very, very fast. And I want to show you this historical lens so you can kind of understand where we’re at with gold.

This is the classic case of hyperinflation in Germany, Weimar Republic. And over a course of nine years, from 1918 to 1923, the german mark to gold ratio took off like a hockey stick. Now, I’ve used this many times, and the reason why I wanna show you this is for two reasons. First of all, if you would have just exchanged your paper dollars for gold and waited nine years, you would have gotten fabulously wealthy.

All right? So showing that you would trade fiat paper currency for real hard assets, gold going up. The other reason why I wanna show you that is because it looks almost like the inversion of this, and this is the debt of the United States. Now, if you watch my channel regularly, you know that inflation is not consumer prices going up. The government tells us it’s CPI, so they can confuse us.

Why did my stake go up and my tv went down? Right? There’s a trillion prices and a trillion reasons why those prices go up and down. Inflation is really when the money supply increases, the price is moving, is the result of that or the effect of that. And the reason why I wanna show you this is because this is the money supply increasing, which looks sort of similar to the Weimar Republic price moving up now, not quite as fast, but the result is the same just over a longer period of time.

Sort of like the frog that’s in the boiling pot of water doesn’t notice the changes as gradually. So when it goes up 50% month over month, of course you notice it. But what about when it goes up 50% over three years, which is exactly where at. Now, the last thing I wanna show you, I always love to show this chart, is in this Weimar republic. Again, if you would have changed your gold marks into gold and you would have held it till 1933, you would have gotten fabulously wealthy.

But most people didn’t. And the reason why they didn’t is because of the volatility. When you’re looking at the prices of things, they go up and down, up and down, up and down, up and down. Oh my gosh, I’m rich. Oh my gosh, I’m broke. Oh my gosh, I’m rich. Oh, I’m broke. I’m rich again. I’m broke again. I’m rich again. I’m broke again. I’m rich again. Now, if you would have just zoomed out and understood what was going on, the debasement was causing mass inflation.

People were rushing to hard assets. But for most of the consumers, they didn’t understand what was going on. And what they did is once they got to here or here or here, they decided, oh my gosh, I’ve never been so rich, I should sell this time before prices crash back down. Sort of like what people think when they saw gold fall off of a tie back in 2021, or bitcoin fall off of a tie in 2021, etcetera.

And what happened is, by the time it crashed, they ended up holding worthless paper instead of actual real assets that the central banks are buying, that the smart people are buying, and that you and I should be buying. So what gold is telling us today is that one, there is a massive amount of money printing coming. That’s what China is saying. They’re stockpiling gold. Not just China, all the nations of the world they understand it.

The Fed is telling this as well. I’ve been saying it for almost two years now. I’m an inflation bull. So one, we can see through the historical lens what is happening now. They’re telling us what’s happening. We can see others preparing for it. And we know this where inevitably goes now gold and bitcoin are moving together. Bitcoin started moving before gold because it’s much more volatile and it picks up on these moves sooner.

Now that gold has officially made this breakout move, we can see this is coming. I would expect this to really start coming on strong over the next six months or so, up until the election. I’ll do a whole nother video on this as to why I think inflation will explode up to the election. If you want it, you can leave me a comment down below. All right, that’s it for this video.

Let me know what you think about this. Of course, as always, give me a thumbs up if you like it, thumbs down if you don’t. But at least leave me a comment and tell me why down below. Subscribe if you’re not already subscribed. And that’s what I got. All right, to your success. I’m out. .

See more of Mark Moss on their Public Channel and the MPN Mark Moss channel.

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