During the last 50 years we have seen 5 vicious corrections in the Dow of between 41% and 55%. But even with these corrections the Dow is today 39x higher than in 1971. There is another relatively small but important investment asset which represents only 0.5% of global financial assets. That asset is up 53x since 1971. But it hasn’t been an easy journey for this asset either. There were 3 major corrections in half a century between 33% and 70%. I am of course talking about gold.
I started calculating the financial plight of the 8 big shorts in COMEX gold and silver on a twice-weekly basis around June 2019. That’s when gold moved higher. The big shorts had added quite aggressively to short positions early in the move and when gold rose $100, the big shorts were out $2.2 billion. As gold rose, the big shorts kept getting deeper and deeper into a financial hole. From the end of the third quarter of 2019 when the 8 big shorts were underwater by $2.4 billion, the losses have progressively worsened over the five subsequent quarters to yearend 2020, when the combined loss hit $14 billion.
Mike Maloney Interview: “They have to steal your purchasing power or the financial system will collapse!”
As you know, the year 2020 saw some remarkable developments for the precious metals. The price of COMEX gold hit new all-time daily highs in August, and price finished at new quarterly highs in June, September, and December. But 2020 was not just about price alone. We saw some amazing and incredible changes within the pricing system as well. So before we put 2020 in the rearview mirror, I thought it would be fun to summarize some of the final COMEX data in order to give you some perspective on the incredible and paradigm-changing year we just experienced.
E.B. Tucker Interview – Why Gold? Because This Is a War Against Your Wealth and Here’s How to Win It
The silver setup could scarcely look better. We have already seen in the parallel Gold Market update how gold is in position to slingshot vertically higher out of a giant Bowl pattern, having already made new highs last year. While silver’s chart does not look as strong as gold’s - yet - that is normal at this stage in the cycle. On silver’s latest 13-yeat chart we can see how, after breaking out of its giant base pattern in the middle of last year, it was beaten back by the resistance shown to then successfully test the breakout point, and has already started higher again and this time it should have little trouble driving through this resistance because the dollar is collapsing. Note how strong the volume indicators are on this chart, with the Accumulation line already making new highs.