Time To Shine

When basketball coach Vitale got his chance to nationally broadcast college games on television, he gave us all a whole new lexicon of words and meanings with letters. His "PTP" leads the pack. Prime Time Players was then used to sell everything from new TV shows to sport clothes. He had new versions like "DD= Dapper Dandy and AB= Awesome Baby!" week-after-week. He was a must be heard announcer. He got his chance and he shined. 

There are many other examples like actors given a major role as a debut. If they hit it right like "Lawrence of Arabia or Rocky," they had a career. 

Stocks have their own history. Millions were made in the early days of tech until the tech wreck reared its head. Bitcoin is showing the same signs. Then, there are those firms or commodities that has stood the test of time. People in the know, when they refer to these, use words like "cycle." 

We, at Evolution believe in cycles. At the moment, there is a quiet debate among the leaders in this field. Harry Denton sees a possible crash by the end of June. The people who run Stock Charts.com see more bullish signs. Dear Reader, you have read our feelings on the matter. At the moment, President Biden is not only pushing the envelop on spending, he is building a larger package to hold his, "something for everyone approach." When your budget is $6 trillion, which is about one-third of our economy, you are spending like a drunk sailor. If he does not counter his spending plans with revenue, our dollar is in big trouble. This brings us to our title. 

We already know that inflation is rearing its head. Manufacturers can't find people, supply chains are tight, raw material costs are off the charts and supply is low. The president is throwing money at any problem. When you mix the drink of money, debt and inflation, only gold can keep you financially healthy. Its time to shine is here. Let's go to the charts...

$Gold, $XAU and $HUI...

Gold is attacking the $1900 level. It takes energy to pass a strong resistance area. Gold should be able to penetrate the $1920 price. If it does, then $1979 is in sight. The last time it was at these levels, it was attacked and fell to a strong support price of $1680. Now, the new support level has been raised to $1850. This is a strong signal for gold. I did not put silver in the sub-headline, but when one talks about gold, silver is always included. At present, silver is stronger than gold. It is in its consolidation range. It is building cause (strength in buying) to re-attack $30. If it can break-through, then $37 is the next target.

I usually get my clues on the price action of gold from the XAU and HUI. If they are trending up, gold will follow. Also, if they are trending down, gold will retrace. At the moment, the XAU is at highs. It just eclipsed its "golden cross." This is extremely bullish. The HUI is not in harmony. I do not like that aspect. It needs to pass 340 and establish a new high. If the two can merge in harmony, we can make some money with the four stocks that I recommended in the past. 

Help!

No, not the Beatles song. Help is coming from directions and places to add flavor to our golden potion. There are many little usages for gold which will add to its price. It is used in your smartphone and other quality gadgets. It is rooted in culture in the two largest populations in the world.

China

With the world's largest population, people are getting married. In China, gold is given as a wedding present. There are over 8 million weddings each year in China. These presents consume 40% of China's buying in gold. These gifts are rarely sold like for hard times. Generally, they are passed down like a family heirloom. Then, there is...

India 

Gold is even deeper in culture in India. India households hold more gold than the US holds in Fort Knox. They possess 5X (five times) our total. So much for being a poor nation. The people of that nation understand the dangers of inflation. It is another reason to keep gold. It takes 140,000 rupees to purchase just one ounce of gold. Somehow, they manage. In 1960, the ratio was 168 rupees for one ounce. They also have the pandemic which is showing itself in their nation. This has put off weddings. This is another positive for gold. The pent-up demand of delayed weddings and other festivals will only cause the price of gold to rise.

Finally, there is this reality. Like the shortages in many staples due to COVID, many gold producers lost workers and thus, production. In the face of strong demand, there is less production. Prices will rise. This is basic economics. Keep in mind this aspect in the US. Consumers expectation for inflation in 2022 is 3.4% and we already know that inflation for March and April of this year to be 1.4% or equivalent to the 10-Year T-Bill. Ten years in two months!   Peace.