The “secrets” of gold are now difficult to hide from the Central Banks and “returns” at its own pace

For a week now everyone has noticed a significant and steady rise in gold. His current price seems to be stabilizing now over $2100 after for several months he remained with small ups and downs over $2000. Analyses predicting a new climb cycle are enough and have been multiplied particularly after the relatively “sudden” drop of its price over $2100. The main argument for its further rise is that the Central Banks have already cultivated a climate of expectations to reduce interest rates , despite the fact that the date that this will begin to happen is being postponed more and more, although inflation – at least the General IMF – continues to slide almost steadily. The turn towards gold markets anyway, especially after 2020, has begun to attract buyers in both physical form (mainly central banks), and ETFs from many and powerful international portfolios. The striking thing is that this trend was maintained with some intermediate returns still when the Central Banks began increasing interest rates to halt inflation. But what really happens? Gold has ceased to be a global reserve currency and plays an important monetary role – at least officially – since the dollar broke (on 15/8/1971) the umbilical cord that firmly linked it to gold, through the Bretton Woods Agreement (1945 – an ounce of gold 35 dollars). Nevertheless, it remains silent as a key ‘component’ of the foreign reserves of all Central Banks, with the Fed still – at least officially – the bank with the largest gold reserves on the planet. So is the ECB. When the European Central Bank was established all the national central banks of EMU have proportionally deposited a significant part of their reserves in gold in the Frankfurt vault. The striking thing is that the gold price rise phases are not halted even when cryptocurrency attempts to steal from its glow, such as the recent rise over $2100. From this column (but also to its predecessors) we have often reminded a simple truth, which has to do with the timeless “value” of gold, which is little changed in reality. Both as ‘value’ and as use has changed nothing to make gold less or more necessary in the economy at all levels of both production and monetary traffic. One might say that it was attempted to ‘use up’ at monetary traffic level in 1971, but what reality proves was and remains an unfortunate intention. So gold was and remains what it was, a glowing extremely difficult to obtain metal, little useful in production. But it remains the analytical gold. So why is it “critical” all the time? The exact answer is that gold does not “accurate” the gold, but the monetary means by which it is invoiced are made. If on August 14, 1971 the last day before the cancellation of the Bretton Woods Agreement one ounce of gold had $35 in every corner of the Earth, today the same ounce of gold has $2130. In other words, the devaluation of the dollar and with it the devaluation of all currencies with which since 15 August 1971 it has been firmly linked or not, is the one that is reflected in the current price of gold. Monetary inflation particularly since 2008 and 2020 helped to achieve this trend of strong international dynamics. Let’s set an example. The dollar is “issued” by the US and “produced” in physical and accounting form in two ways. One is the “printing” of new notes, the other is the “production” of debt from the American public and its further “poiling” then from the banking system and the financial markets. To have a relevant picture of him means that in “dollars” it is enough to say that the American public issues about a trillion debt in dollars every 100 days. It is every three months on average that a trillion dollars is added to the financial markets. And it’s not just the American public. In the Eurozone, member countries in the first two months of 2024 have issued debt that reaches half a trillion Euros. These dollars… Euros, etc., with their entry into the economy are multiplied by derived debt products from the financial markets by dozens of times. In other words, the matching of the production of ‘dollars’ or other currencies multiplied at geometric rates no longer have any real connection in their match against the production of products or much more than the extremely limited production of gold, which is invoiced in these currencies… Of course there are many other factors that also affect the “price” of gold, such as the fact that this “price” is determined by two stock exchanges, one in London and one in New York (by decision of five banks handling it) and in which the “price” of gold is “defined” by the centrally controlled “game” of gold derivatives by those “players”. In other words, this ‘price’, if it had not passed through these stock millstones, would have been ejected to much higher ‘layers’ of the monetary sphere. This is also a key reason why in the last 2 – 3 years gold markets have been multiplied in natural form, mainly by the Central Banks moving within the limits of the BRICS + zone. The decision of Western governments to seize Russia’s foreign exchange reserves on the occasion of the war in Ukraine has increased the attention of major regional banks in the gold markets with the Central Bank of China today to be the largest gold buyer despite China being one of the largest if not the largest gold miner. “Kalio donkey” the wan on the …gold “para donkey, they seem to say in Beijing. In other words, in the region of the global monetary system in which 44% of global GDP is produced and more, an informal “return” has begun in a more …terrestrial relationship of their currencies with gold, as the uncontrolled monetary inflation of American debt puts the global economic and monetary system ahead of uncontrolled situations. Uncontrollable economic, monetary and geopolitical, as evidenced by Ukraine, Gaza, the Red Sea, or possibly…Taivan. These broader international trends are now “working” in the background of the dynamic trend of strengthening “prices” rather than the “value” of gold, which remains anchored in its historically shaped role …

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