As the mainstream media continues to tout the rise of gold prices, George Gammon believes that the so-called “Goldilocks conditions” for the precious metal are nothing more than a myth.
In the above video, George dives into historical charts and data to prove his point that the experts are completely wrong about gold.
He starts by analyzing gold's performance during recessions, which he presents on a fascinating chart that he assures viewers will want to take notes on. The chart showcases how the price of gold trends leading up to a recession, starting around 150 days prior and gradually decreasing until the recession hits. It then starts to flatten out before going parabolic and peaking out around 116 days after the recession has already started.
“Experts say gold is about to explode higher, but are they missing something? History shows us that during a recession, gold prices actually trend down. Check out the charts for yourself! Is the recession already here, or is it still to come? #GoldPrices #Recession
But here's where things get interesting: the official recession date is always announced after the fact, which means that by the time the central planners make their announcement, it's already too late to predict the direction of gold prices.
So how can you determine where we are in the recessionary cycle? George argues that you likely won't get that information from the central planners in real-time.
So, George argues that predicting the direction of gold prices based on recessions is tricky, but he believes that the current Fed's monetary policy will lead to a recession in the future.
And if we assume that the green arrow on his chart represents where we are in the recessionary cycle, then the price of gold will go down soon. But once the Fed pivots and starts to lower rates, the price of gold will likely go much higher.
To further prove his point, George presents a Fed funds rate chart and its corresponding relationship with recessions throughout history. He shows how the Fed hikes rates, pivots, drops rates, and then we get the recession. The same thing played out during the COVID-19 pandemic, and George believes it will happen again in 2023 or 2024.
But wait, there's more! George also takes a look at the gold price during significant events like the 2008 financial crisis and the COVID-19 pandemic. He notes that gold prices plummeted during these crises because it's the asset that has no counterparty risk, and when the big pools of money need liquidity, they have to sell anything on their balance sheet that has a bid. Usually, that's gold.
George believes that we're just seeing the tip of the crisis iceberg with the recent commercial real estate downturn and that the worst is ahead of us, which is another reason why he thinks the price of gold could go lower in the near future.
🚨📉 Experts predict a #gold price explosion, but they're WRONG! 🙅♀️ Here's why: we need to understand where we are in the recessionary cycle. ⏰ Once the Fed drops rates, based on historical data, #gold prices will soar! 📈 Don't wait for the central planners to tell you. I've got the inside scoop! 🔍 Plus, I have a large allocation of gold in my portfolio as an #insurancepolicy. 💰 #investing #recession #economy #stocks #trading
But before you panic and start selling all your gold, remember that George doesn't own gold as a speculation or investment; he owns it as an insurance policy. And over the past 5000 years, gold has proven to be an excellent insurance policy, maintaining its purchasing power throughout history.
In conclusion, while the mainstream media may be touting the rise of gold prices, George believes that the experts are wrong about gold. While he admits that predicting the direction of gold prices based on recessions can be tricky, he believes that the current Fed's monetary policy will lead to a recession in the future, which will cause gold prices to go down before eventually going higher. And regardless of what the price of gold does in the near future, George still believes that gold is an excellent insurance policy and a valuable addition to any portfolio.
Hi George I am trying to watch your videos here in NZ and sadly the last few I have watched freeze within a few minutes of playing. I have thoroughly enjoyed all of your presentations. With all due respect though, I believe the global demand for gold will be massive, even entering this recession, for multiple reasons… #1 BRIICS+ countries are moving to hard-back their national currencies and their new joint trading currency instrument with multiple commodities including gold. With Putins ‘put’ at the beginning of the Ukraine SMO, where Russia offered to sell its oil at a 30% discount… Read more »
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