Alasdair Macleod’s Gold Outlook For 2020

The comments below are an edited and abridged synopsis of an article by Alasdair Macleod

This is an overview of the economic conditions that will drive the gold price in 2020 and beyond: The turn of the credit cycle, the effect on government deficits and how they are to be financed are addressed.

Macleod's Gold Outlook For 2020 | BullionBuzz
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In the absence of foreign demand for new US Treasuries and of a rise in the savings rate, the US budget deficit can only be financed by monetary inflation. This is bound to lead to higher bond yields as the dollar’s falling purchasing power accelerates due to the sheer quantity of new dollars entering circulation.

It may turn out that recent events on the Comex, with the expansion of open interest failing to suppress the gold price, are an early recognition in some quarters of the US government’s debt trap.

Macleod discusses gold in the context of distorted markets; gold and rising interest rates; the market for physical gold; paper markets; and a two-step future for the gold price.

“As noted above, the path to a final crisis for fiat currencies might have already started, with the failure by the establishment to suppress the gold price through the creation of an extra 100,000 Comex contracts. If not, then any success by the monetary authorities to reassert control is likely to be temporary.”

“Perhaps we are beginning to see the fiat currency system unravel, in which case those that insist gold is not money will find themselves impoverished.”

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