Loading ...Red Label’s Gold Price “Formula”
I think this is brilliant sleuthing by our member Red Label
His original thesis is posted on the sidebar https://goldtadise.com/?p=417060
I am re posting his comments to a query by Northstar in a post below that many have likely missed.
here is my interpretation first:
I believe Red is saying he has discovered that the ratio 120,000 divided by the DXY is a constant ( plus or minus 3%) where the price of gold is adjusted to by the PTB….within the framework of the Bretton Woods Monetary System)
Basically Red is saying that Gold is tied to the DXY ( dollar index) and will not be in a Bull until it is rising regardless of the Dollars movements.
Until this ratio is broken , as it was going into the 2011 top…the price of gold is going nowhere and is NOT in a Bull market
Do I have this right Red ?
If the Gold price is wandering from this 120,000 / DXY it will be adjusted up or down frequently to get back in line.
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That’s the theory Fully. IMO physical buying or selling from other sources other than the CB’s drives deviations in Gold price. IMO The CB’s want and need a steady price in Gold.
If the $USD is = 100 has shown that Gold price = $1200 +/-. there has been a correlation in play since last November regardless of the $USD Index Gold has remained in this ratio +/- 3%. The deviation from the ratio being overbought oversold conditions in the market. The OB/OS conditions were in the range of $20-$50. The interesting thing OS conditions were not necessarily followed by OB conditions and vice versa.
1200/($USD/100)
Chart in TradingView “120000/DXY”
Likewise today 1200/(89.70/100)=1337 Gold is showing to be $7 below the ratio at the moment. Gold has tracked this ratio for the last 15 months step for step. If the ratio holds 80 $USD will yield $1500 +/- Gold (likewise if the 110 $USD will yield $1090 +/-). So if you anticipate in your post a $100 dollar drop in Gold (ie $1200) it would likely mean an increase in the $USD near 100 unless the ratio breaks.
IMO the correlation needs to break for there to be a bullish /bearish market in Gold otherwise it is simply currency movement (purchasing power of the $US).
IMO the CB’s protect the G20 currencies with Gold in a mutually agreed upon price subject to outside commodity markets. It appears the mutually agreed price is 120000/DXY. IMO since 1971 there have been two occasions where the outside forces drove the Gold price 1971 -1981 and 2001 – 2011. The theory is the CB’s gradually adjusted the value of Gold from $35 to $300 and again from $300 to $1200 during those time periods? A new variable Bretton Woods for lack of a better description?
So the banksters, with their unending supply of newly created fiat currency, and with their shameless ability to purchase naked short positions in the PM market, have won. At least for now.
We gold bugs are left with few options – give up, go broke, or hunker down and wait.
Good, original thinking RL.
The “wild Cards” countries not in the G20 and the Public. The correlation will break eventually IMO.
Bingo…! Putting it all Together
Strong Gold Buying From Other Sources is what we need to unhinge the Gold Pricing Band….Red has simply explained what no Manipulation Factory Goldbug Site has not ever even discussed.
Gold prices have always been controlled until the pressure cooker of demand overwhelms the pricing control cartel ( CBs )
So now that we can all agree that this is and always has been an integral and Imperitive part of the Monetary system….we can all stop whining about it. We are playing in a controlled market Because we think it’s time for the world to start buying Gold Frantically….so the price will rise ….well I bet not many of us hard core Goldophiles are even buying Phys….a recent poll shows this…..so WHO the F%^&*K is going to buy enough to overwhelm the cartel and cause them to make a retreat to the next leve…which of course is $10,000 overnight !
Now the final piece of the puzzle…Adam Hamiltons great piece on how the GLD buying affects the price of gold….It is the ultimate determinant of the price of Gold….When GLD shares are bought it creates a need for Phys to be bought by this ETF to balance their books. So that brings me to the point
Who would like to volunteer ro keep Schism’s excellent proprietary Chart…update and alive exclusively for Goldtent
Schiz emailed me the formula ….there is no know chart for GLD Holdings….so he made one and now he has sent the formula for updating the chart daily it’s simple I am sure…but so am I… am an illiterate and some one else needs to do this. I will get any volunteer to hook up with Schism and soon we can have an updated chart posted daily.