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Gold Making New High
Gold broke through the Breakout Line for the third time intraday but for the second time closing above it Our primary targets were 1926 and 1976 and the upward channel resistance stands at 1982.10 by Wednesday the 29th. If gold can exceed today's highs tomorrow, then there is a shot of the high forming this week on the 29th. Then we need to see gold close above 1926 on Friday. The failure to do this will see a retest of support into September.
The fundamental spin has been mainly concerning the rising political tensions between the US and China on top of worries over the continuing coronavirus pandemic. However, while that seems to be the primary fundamental explanation spouted out on the market, quietly the real concerns are that e-RMB which China will begin a trial for payments in its new digital currency in four major cities from next week. In recent months, China's central bank has stepped up its development of the e-RMB, which is set to be the first digital currency operated by a major economy.
The real concern is that China is seeking to circumvent US sanctions which Congress fails to understand that such policies undermine the dollar and the world monetary system. However, by moving to a direct e-RMB, they are also circumventing the SWIFT clearing system. This undermines the entire Western monetary system and takes power away from the IMF as well. It was Christine Legard who threatened the offshore tax havens that they had to turn over everyone or they would be blocked from the SWIFT clearing system. China's e-RMB circumvents the SWIFT system for there is no way to clear digital currencies and thus this prevents other nations from trying to use a currency for sanctions or to block them from SWIFT to extort information for taxation purposes.
This is the real implication of adopting a national digital currency that will eliminate private cryptocurrencies. While the EU has been exploring the abandonment of paper money solely for tax purposes, China is the first major economy to move in this direction but it will strengthen its long-term economic goals by circumventing the SWIFT system. According to our sources, they studied BitCoin closely and saw how it was used to get money out of China without using the banking system and hence outside of SWIFT.
This is on time without July target, but it is also opening a door to a whole new monetary system which will become extremely critical as we head into the Monetary Crisis Cycle 2021-2022. We should expect other nations to begin to explore bringing their digital currencies online ASAP. Some see this as the final death of the US dollar as the reserve currency. We see this as the ultimate end, but that may not arrive until 2022-2024. Keep in mind that US politicians are stupid! They do not understand that imposing sanctions on other countries undermines the dollar. They may think they can wield power as the old days, but those days are fading rapidly. Moving to digital currencies changes the entire world monetary system in ways they do not understand.
Ideally, we still see a temporary high this week with a target range of 1976-1986, just shy of the 2000 level. Exceeding 1986, implies the next resistance stands at 2003-2005. |
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