At the end of the last trading day of 2017, gold closed at $1302, above the critical $1300 threshold. Gold has now closed the first week of the new year at $1318. Slowly but surely, gold is on the rise. With geopolitical tensions rising in the Middle East (Iran protests) and the Korean peninsula, not to mention the ongoing migrant crisis in Europe, gold may be poised to go even higher.
Then, there's the Petro-Yuan. It's official introduction date now appears to be set for January 18. The Petro-Yuan will go into direct competiton with the Petro-Dollar, which is backed by nothing. The Petro-Yuan on the other hand will be backed by gold. Yes, you read correctly.
The Chinese have made deals with Iran and Russia (and others) to buy their oil with Yuan instead of dollars which in turn, can then be traded on the Shanghai Exchange for real physical gold.
What do you think that will do to the American dollar? The likely scenario is that the dollar will crash in the near future. By how much and exactly when, I don't know. This will likely force the US Government to eventually partially back their dollar with gold and while the USA does have about 8,000 tonnes of gold, the trillions of new dollars they printed in the last few years alone will have to be squeezed to fit into this pile of gold. Currency has expanded but not the gold.
In all likelihood, the US Government will be forced to reprice gold to match the amount of dollars in circulation in order to restore confidence in its currency. This equates to one ounce of gold in the price range $5,000 - $8,000. Others will say even higher, others will say lower.
To me, the writing's on the wall. Gold will be revalued at a much higher price either by the Americans or the Chinese and likely a lot sooner than most people realize. It's a great time to get in and buy gold. If you can't afford to buy gold, then consider a high quality gold miner. Most of the gold miners are still suffering from depressed share prices and that presents a fantastic opportunity for investors.
The one gold miner I have my eye on is K92 Mining (TSX: KNT.V OTC:KNTNF). As of writing, their shares are at 46 cents. Have a look at my previous post on K92 to learn more about this great opportunity.
