Jan 22, 2025 - (Gold Market Wire) - Gold Continues its march higher, consolidating above the horizontal resistance we cleared in the previous session.

We're heading towards the upper end of the channel and traders might want to take some profit as we approach. Gold is ripping, and there is little in its way.

Right now the Gold crowd is positively crowing, but they should take some caution before breaking out the champagne which they can so clearly afford now. Yes, there is hidden inflation lurking that is probably going to surge later. The ultra-wealthy are market savvy, and are starting to accumulate. But these are all symptoms of larger problems.

The first of these are that the excess of government debt is starting to impact bond markets. Increasingly, traders will be focussed on the 'success' of auctions. That is fuel for Gold. People are starting to question if we are on the verge of a spate of sovereign debt defaults that will rock the world. We are tending towards the belief that we are getting closer to that juncture... with all the foreboding that such an event inspires. If we go into a sovereign debt default, the global government spending spree is going to come to halt very quickly - including social security, pensions, unemployment etc etc. That will change the world in a very drastic fashion.

Another, unfortunate, facet of gold accumulation is the anticipation of war. Right now, for the observant geo-political forecasters, it would appear as if some of the European nations are toying with the idea of instigating a direct troop deployment into the Ukraine conflict - i.e, on Ukraine territory. This would be akin to a suicide mission. The calculus may be that once French/British/German troops start taking casualties in a direct war with Russia, they will be able to call on America for support and WW III will commence. Given who is sitting in the White House - this is far from an assured outcome. One may reasonable conclude that the wild ideas to instigate a direct conflict with Russia by Starmer and Macron could be part of the reason for Gold's latest surge.

We leave this missive with a quote from the Master himself:

"Anyone who's excited about the idea of Gold going to $5,000 needs prozac or a psychiatrist. Or both."