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Gold Bugs! – Here's Our Pullback!

Forex Kong 20 Comments

Just fantastic.

The recent surge in gold now wiping out the “bottom pickers” and providing excellent long term opportunity across the board. This is the dip to be bought.

The price of Gold is now the exact same as it was back on May 14th! We’ve timed it perfectly, and haven’t missed a thing.

I’m still waiting for lower in both Gold, Silver as well the related mining stocks but as of today one can “offically” get it on their screens, and start creating those short lists.

EXK has always been a favorite of mine, but “it’s all gonna go” in the same upward direction once this pullback runs its course.

A blast from the past: Gold Going Down

You’d have to imagine that “letting gold out the basement” has some pretty braod sweeping implications…one being…..now that The Fed has losened the grip one can imagine that USD will also be allowed to move higher – as the “massive dilusion” will once again be masked with both Gold and USD moving higher medium term.

Fantastic!

 

 

 

The Currency War Reshaping Global Markets

The gold pullback isn’t happening in isolation — it’s part of a massive currency realignment that’s been brewing for months. While retail traders panic over temporary price swings, institutional money is positioning for what comes next. The Fed’s loosened grip on gold signals something far bigger than a simple commodity correction.

USD Strength: The Great Illusion Returns

Here’s the beauty of this setup: the dollar is about to surge, but not for the reasons most traders think. As gold finds its footing and begins the next leg higher, USD will simultaneously strengthen through pure monetary engineering. This isn’t contradiction — it’s coordination. Central banks are orchestrating a scenario where both assets can rise, masking the underlying debasement that’s been accelerating since 2020.

The technical picture supports this narrative perfectly. DXY is coiling for a breakout just as precious metals complete their corrective phase. Smart money knows that USD weakness was the appetizer — dollar strength is the main course that allows for controlled inflation management while maintaining global reserve currency status.

Mining Stocks: The Leverage Play Nobody’s Watching

EXK and the broader mining complex are setting up for the trade of the decade. While crypto gets all the headlines and tech stocks grab retail attention, precious metals miners are quietly building the foundation for explosive moves higher. The sector has been systematically destroyed over the past two years, creating the exact conditions necessary for maximum upside leverage.

When gold moves from $2650 back toward $2800, these mining stocks don’t move 6% — they move 60%. The mathematics of operational leverage combined with depressed valuations creates a perfect storm for wealth creation. The institutions accumulating these positions aren’t doing so for modest gains.

The Timing Convergence

May 14th wasn’t just a date on the calendar — it was the high-water mark before this engineered correction. Every professional trader worth their salt has been waiting for this exact retest. The fact that we’ve returned to those precise levels while maintaining higher lows in the broader trend structure confirms the manipulation is complete.

Market makers needed to flush out the momentum chasers and weak hands before the real move begins. Mission accomplished. The rally setup is now pristine, with maximum pain already extracted from both sides of the trade.

The Macro Picture: Beyond Gold and Dollar

This isn’t just about precious metals or currency manipulation — it’s about the controlled demolition of the old monetary system and the careful construction of the new one. Gold rising alongside dollar strength provides the perfect cover for massive fiscal expansion while maintaining the illusion of monetary stability.

Think bigger than individual trades. Central banks globally have been accumulating gold at record pace while simultaneously supporting dollar strength through coordinated intervention. They’re not hedging against each other — they’re working together to manage the transition to whatever comes next.

The implications stretch far beyond traditional forex markets. Commodity currencies will get crushed as dollar strength accelerates. Emerging market debt will face renewed pressure. European assets will underperform as the euro weakens relative to both gold and dollars.

But here’s the key: this entire setup has a shelf life. The window for positioning is narrow, measured in weeks not months. Once the moves begin, the opportunities disappear as quickly as they emerged. Professional money is already positioned. Retail traders are still debating whether the correction is over.

The answer is simple: it is. The dip has been bought by those who matter. The rest is just noise.

Chinese Fire Sale – U.S Dollar Up In Smoke

Forex Kong 43 Comments

Make no mistake…China “will” take the hit on those warehouses filled with “useless dollar bills”, or at least what’s left of them by the time they’ve used all they can to buy gold.

As the “macro plans” continue to take shape, the Chinese will soon look back on the “massive fires that raged through the warehouse district” as a passing story in the news – in the context of a “time of change”.

Consider trading hockey cards with a couple of the other kids on your street. All of the same set and series, until a month or two later a new set is introduced and you start trading those. More kids are buying and trading these “new cards” until finally – all you’re left with is a tiny box of the “old ones” eating up precious storage space under your bed.

Eventually you forget all about them, as the trade of these “new cards” now has you buying and trading with little concern for the “few dollars lost” on the inventory of “old cards” gathering mold underneath your bed.

I think that sums it up.

As China continues to grow its domestic economy, and promote trade in Yuan as opposed to the U.S Dollar, it’s really only a matter of time until both China as well “a large portion of the industrialized world” separates completely from any dependence on a U.S imposed system of trade in U.S Dollars.

We good here?

No terrorism here. No “bash America” / China to rule the world type thing no.

Just a simple outline of how a couple of countries on this planet have grown to be less “export dependent” and more “domestically driven” and far less interested in the purchase and hold of U.S “funny money”- with the unfortunate result leaving The United States and it’s continued devaluation of the U.S Dollar  – out in the cold.

As the Fed continues to “mask” the true devaluation of the U.S Dollar by shorting the gold paper market and driving prices down, China gladly scoops up every ounce she can – demanding “actual delivery of the physical gold”.

China will continue to not only produce more gold, but as well purchase more gold “on the cheap” with every single “Fed raid in the paper market” to soon present the Yuan as a completely convertible currency on the global stage.

Complete with stockpiles of “real gold” sitting in vast warehouses behind it…..somewhere on the other side of the tracks.

So what does this mean for the future of the U.S Dollar and it’s use as the worlds reserve currency? What does this mean for the massive amounts of money previously gained by the U.S via the “use” of USD in trade world wide – soon to be lost?

 

 

The Yuan’s Rise and the Dollar’s Inevitable Fall

The writing isn’t just on the wall—it’s carved in stone. China’s systematic accumulation of physical gold while dumping dollar reserves represents the most calculated currency transition in modern history. This isn’t speculation anymore. It’s mathematics.

Every Fed paper raid on gold prices hands China another opportunity to exchange worthless digital dollars for real, physical wealth. They’re not just buying gold—they’re buying the foundation of the next global monetary system. While Western central banks play games with derivatives and paper contracts, China demands delivery. Physical metal. Real wealth.

The Reserve Currency Death Spiral

Reserve currency status dies slowly, then all at once. The U.S. has enjoyed decades of monetary privilege—printing dollars and watching the world accept them as payment for real goods. That free ride is ending. China’s domestic economy now provides the scale to operate independently of dollar-denominated trade.

When nations can trade directly in yuan backed by gold reserves instead of dollars backed by promises, the choice becomes obvious. The petrodollar system crumbles when the world’s largest oil importer offers gold-backed yuan as an alternative. Physics always wins over politics in the end.

The Federal Reserve knows this. Every suppression of gold prices through paper manipulation is desperation disguised as control. They’re fighting a losing battle against economic gravity. Dollar weakness isn’t temporary—it’s structural and permanent.

Gold: The Ultimate Currency Reset

Gold doesn’t lie. It can’t be printed, manipulated, or created from thin air. China understands what the West forgot—real money has intrinsic value. Paper currencies are promises. Gold is performance.

The current gold-to-dollar ratio tells the whole story. Historically suppressed gold prices make every Chinese purchase a bargain basement acquisition of monetary supremacy. They’re not investing—they’re positioning for the inevitable repricing when paper games end and reality returns.

Central banks worldwide are following China’s lead, quietly accumulating gold reserves while publicly supporting the dollar system. They know what’s coming. Smart money doesn’t wait for CNN to announce the transition—it positions before the crowd realizes the game changed.

Trading the Transition

This macro shift creates massive opportunities for traders who see beyond the headlines. Currency pairs reflect these underlying power dynamics. Dollar strength against major currencies masks weakness against real assets.

The yuan’s gradual appreciation against the dollar isn’t market sentiment—it’s economic destiny. China’s trade surpluses, gold accumulation, and domestic growth create unstoppable momentum. China’s accumulation of physical assets while others hold paper promises will determine the next decade’s winners and losers.

Gold-backed currencies will outperform debt-backed currencies. It’s not ideology—it’s accounting. You can’t print your way to prosperity forever. Eventually, the bills come due.

The Endgame Approaches

The transition won’t be announced on financial television. It’ll happen quietly, through bilateral trade agreements, currency swaps, and resource deals denominated in yuan. Each agreement reduces global dollar demand while increasing yuan utility.

When the tipping point arrives—when more international trade occurs in yuan than dollars—the reversal will be swift and brutal. Decades of accumulated dollar reserves will flood back to America, creating the inflation that makes Weimar Germany look like a practice round.

China’s patient strategy wins through persistence, not drama. They don’t need to defeat the dollar system—they just need to build a better alternative and wait for economic gravity to do the rest. The warehouse fires consuming worthless paper won’t even make the evening news. By then, everyone will be too busy trading the new currency to remember what the old one was called.

The Nixon Shock – Gold, China And USD

Forex Kong 8 Comments

I want to explain something, that I think most of you will find beneficial ( much of the material reworded from Wikipedia ) as well bring it “up to speed” as to what it means in today’s day and age. This might go on for a couple of posts.

After WWII the “international financial powers that be” agreed to create a system wherein the U.S Dollar was placed deliberately as the anchor of the system, with the US government guaranteeing that every US dollar held in reserve – could be exchanged at a fixed rate for gold.

Everyone agreed to use a single currency ( the U.S Dollar ) for international trade, and that those dollars could be exchanged for a “fixed rate of 35 dollars” for an ounce of gold.

This is what is meant by a “gold backed” currency, providing holders of that currency the “confidence” that the pieces of paper in their hands are “actually worth something”…that something being gold.

For every dollar on the planet an equal amount / value in gold, should the holder of that dollar choose to own gold instead.

Got it? Excellent.

This made things “relatively” straight forward as countries around the world “pegged” their local currency to the U.S Dollar, and the U.S Dollar was pegged to the price of gold.

Price “stability” had been established.

So for the first years after World War II, the system worked well as foreigners wanted dollars in order to  spend on American goods such as cars, steel “manufactured” in the U.S.

The U.S. owned over half the world’s official gold reserves ( 574 million ounces at the end of World War II ) so the system appeared secure.

Well….by around 1966 ( due to excessive spending by the U.S for the Vietnam War as well many domestic programs ) the U.S realized that foreign banks reserves had grown to about $14 billion dollars, while the United States had only $13.2 billion in gold reserve. Of those reserves, only $3.2 billion was able to cover foreign holdings as the rest was covering domestic holdings.

essentially the U.S had printed ” a few too many dollars” to cover the actual amount of physical gold held in their vaults.

Soon foreign countries ( holding depreciating USD ) began demanding redemption of these dollars for “real gold”. Switzerland redeemed $50 million, then France acquired $191 million etc until finally on the afternoon of Friday, August 13, 1971 President Nixon “literally pulled the rug out from under the system” ( The Nixon Shock ) and closed the gold window – forbidding foreign holders of U.S Dollars from exchanging them for gold, essentially “sticking foreign holders of U.S Dollars” with a currency now set to be dramatically devalued.

The Nixon Shock unleashed enormous speculation against the dollar as you can imagine. With no gold behind them, the value of “boatloads” of U.S Dollars distributed world wide……..now put into question.

I promise I’ll skip the middle part…and get this up to what’s happening in the world “right now” with China’s movement/interests  in particular.

 

 

 

The Collapse of Bretton Woods: Birth of the Modern Currency Wars

That moment in 1971 changed everything. Nixon didn’t just close the gold window—he unleashed a monetary free-for-all that’s still raging today. Without the gold anchor, currencies became weapons in an economic war where central banks could print their way out of any problem. Or so they thought.

The Immediate Aftermath: Currency Chaos

The Nixon Shock created the floating exchange rate system we live with today. Suddenly, currency values weren’t tied to anything tangible—they floated on perception, politics, and manipulation. Countries could devalue their way to competitive advantage, but this game had consequences. The dollar, freed from gold constraints, began its long journey toward becoming pure debt-backed paper.

Foreign holders of dollars got stuck with depreciating assets overnight. France and Switzerland saw this coming, which is why they rushed to convert their dollars to gold before Nixon slammed the door. Smart money always moves first. The rest got left holding the bag—a lesson that echoes today as nations quietly diversify away from dollar reserves.

The Petrodollar System: The Next Chapter of Control

By 1974, the U.S. struck a deal with Saudi Arabia that would prop up the dollar for decades. Oil would be priced and sold exclusively in dollars, creating artificial demand for the greenback. Countries needed dollars to buy energy, so they had to hold dollar reserves. Brilliant move—except it required military backing and constant economic coercion to maintain.

This petrodollar recycling system gave the U.S. the “exorbitant privilege” of printing money to buy real goods from other nations. But privilege built on coercion has an expiration date. We’re watching that system crack in real-time as major oil producers begin accepting other currencies and central banks accumulate alternatives to dollar reserves.

Digital Gold and the New Monetary Reality

Today’s monetary system faces the same fundamental problem that killed Bretton Woods—too much debt, too much printing, and not enough real backing. The difference now is that alternatives exist. Bitcoin represents digital gold that no government can confiscate or devalue through printing. Nations are starting to understand this.

When strategic reserves include Bitcoin alongside traditional assets, it signals the same loss of confidence in the dollar system that drove countries to demand gold conversion in the 1960s. History doesn’t repeat, but it sure as hell rhymes.

The Modern Currency War: What It Means for Traders

Understanding this history gives you the context for today’s currency movements. The dollar’s strength isn’t based on economic fundamentals—it’s based on the fact that there hasn’t been a viable alternative. That’s changing rapidly. Central bank digital currencies, gold accumulation by Eastern nations, and the rise of Bitcoin are all responses to the same underlying problem: fiat currencies backed by nothing but promises.

Every time you see USD weakness, remember you’re watching the slow-motion collapse of a system that’s been built on printing money since 1971. The trade opportunities are massive for those who understand the bigger picture.

Smart traders position themselves ahead of these tectonic shifts. The dollar may have decades of momentum behind it, but momentum eventually meets reality. And reality is that unlimited money printing eventually destroys the currency doing the printing. Nixon bought the U.S. fifty years of kicking the can down the road. That road is ending, and the next monetary system is already being built by those who learned from history.

The gold window closed in 1971, but a new window is opening—one that leads to a monetary system based on mathematics rather than political promises. Get positioned accordingly.

Gary Savage – The Dumb Money Tracker

Forex Kong 40 Comments

Once again I have trouble containing myself.

Here’s the original post where I quite blatantly called Gary out to discuss his “incredible investment advice”. Specifically TO BUY LONG TERM PUTS ON QQQ AND SPY on December 22nd.

Calling Out Gary Savage – Shame On You Man

The crux of “my issue” with this was the suggestion of “buying long dated puts for 2016” with the expectation of “holding these puts” for “potencially massive gains”.

Now – only 3 weeks later “The Dumb Money Tracker” is suggesting – and I quote:

“””At this point I think one has to throw caution to the winds and just buy stocks. Knowing that the Fed is going to protect the market for the foreseeable future.”””

“””Don’t worry about momentum divergences or trend line breaks. All one needs to know is that the Fed is handing out free money and all you have to do to get your share is buy stocks.”””

3 WEEKS LATER! This……only 3 weeks later.

I can’t for the life of me imagine what “other gems” Gary offers for a “$1 trial subscription”.

You can do your best again man….should you choose to “pop in” and clarify – but to be honest I really don’t see the point.

Smart money?

How bout “No Money”.

The Real Cost of Following Flip-Flop Analysis

This Gary Savage situation isn’t just about one analyst getting it wrong — it’s a masterclass in why traders lose money following opinion merchants who change direction faster than wind socks. The guy went from “buy long-term puts for massive gains” to “throw caution to the wind and buy stocks” in three weeks. That’s not analysis; that’s financial whiplash.

When Conviction Becomes Comedy

Real traders know that markets don’t pivot on a dime without fundamental shifts. The Fed didn’t suddenly become market saviors overnight, and economic conditions didn’t magically reverse in 21 days. What changed was Gary’s ability to stick to his original thesis when the heat got turned up. This is exactly the kind of flip-flopping that destroys trading accounts and confidence simultaneously.

The options market doesn’t forgive this kind of indecision. Those long-dated puts he recommended? They’re bleeding theta every single day while subscribers scramble to figure out whether they should hold or fold. Meanwhile, the same voice telling them to hold for “massive gains” is now screaming the opposite message. It’s amateur hour dressed up as professional analysis.

The Fed Put Mythology

Let’s address this “Fed protection” fantasy that Gary suddenly discovered. The Federal Reserve isn’t running a charity for equity investors, despite what the financial media wants you to believe. Their mandate involves employment and price stability, not ensuring your SPY calls print money. This whole “Fed put” narrative is dangerous thinking that creates exactly the kind of complacency that leads to massive drawdowns when reality hits.

Professional traders understand that central bank policy creates conditions, not guarantees. The idea that you can ignore technical analysis, momentum, and trend breaks because the Fed has your back is precisely how smart money separates retail traders from their capital. Tech stocks don’t rally just because someone at the Fed hints at accommodation — they rally on earnings, innovation, and genuine demand.

The Real Smart Money Play

While Gary’s subscribers are getting motion sickness from his directional changes, actual smart money is playing a completely different game. They’re not betting on Fed salvation or buying puts for apocalyptic scenarios. They’re trading currencies, commodities, and global flows that most retail analysts completely ignore.

The dollar’s trajectory, emerging market dynamics, and commodity cycles don’t care about Gary’s weekly revelations. USD weakness creates opportunities across multiple asset classes that require actual analysis, not mood swings disguised as market insight.

Real conviction comes from understanding macro trends that unfold over months and years, not from panic reactions to three weeks of price action. The professionals building generational wealth aren’t subscribing to services that change their entire outlook based on short-term noise.

The Subscription Trap

Here’s what really bothers me about this whole charade — the $1 trial subscription model. It’s designed to hook traders during their most vulnerable moments, usually after they’ve taken losses and are desperately seeking someone else to blame or guide them. The low entry price creates the illusion of low risk, but the real cost comes from following contradictory advice that destroys both capital and confidence.

Professional trading requires consistency, discipline, and the ability to admit when you’re wrong without completely reversing your entire worldview. Gary’s three-week flip demonstrates none of these qualities. Instead, it shows exactly why successful traders develop their own analysis skills rather than outsourcing their decision-making to opinion merchants.

The market doesn’t care about your subscription service or your trial offers. It cares about supply and demand, capital flows, and economic reality. Those forces don’t reverse course because some analyst changed his mind after a few red days. They evolve based on fundamental shifts that take time to understand and even longer to play out.

Save your money. Develop your own analysis. And remember — if someone’s market outlook changes dramatically every few weeks, they’re not providing analysis; they’re providing entertainment.

Safe Havens – Who Gets The Lions Share?

Forex Kong 22 Comments

As a larger and more pronounced “correction in risk” draws near – we’ll likely get “on more” attempt at new highs – regardless of what’s already underway in currency markets.

It also looks pretty clear to me that this will line up “right on the money” with the ol standard correlation of weaker stocks = stronger dollar, or at least for the initial “zig” of the “soon to be created” series of lower highs and lower lows.

As per the last 6 – 8 months these “zigs n zags” will often see “inverse movement” on smaller time frames, as the “cross winds of influence” push and pull in a generally “confusing manner”.

Sounds like a bunch of hooey doesn’t it? Now try trading it.

To be honest – we really can’t say for certain how things will shake out when / if we do finally get our first “real and true” correction in risk, as it’s been so long, and so much has changed since last time.

For currency traders here’s a mind bender. Do not be surprised at all to see BOTH the Japanese Yen AS WELL the U.S Dollar rise TOGETHER. So if you see the currency pair USD/JPY moving lower – it means that JPY is rising MORE than USD – get it? I thought not.

Otherwise, as suggested by JSkogs ( reader / trader “profesionale”) consideration of where U.S Bonds will go, and of course Gold.

As all four of these assets ( JPY , USD , U.S Treasuries and Gold ) have all at one time or another represented “a play for safety” – it remains to be seen which will take the lions share, when indeed safety is sought.

I for one can’t see the U.S Bonds doing anything but “bouncing”, and am positive that the Japanese Yen will blow people’s faces off, if only for an incredible blast higher.

I’d “like to think” that any USD bounce will be short-lived ( and certainly not a macro change in trend ) and that Gold yes gold…….finally makes its turn.

It will be very interesting for those of us who’ve been trading markets prior to 2008 ( and I can only imagine for those who’ve been trading longer ) to see how this plays out.

I plan on it been equally profitable as well.

Thoughts welcome as always!

When Safe Havens Collide: The Coming Market Reset

Here’s what most traders don’t get about the coming correction — it’s not going to play by the old rules. The traditional “risk off” playbook where everything moves in nice, predictable patterns? That’s dead. We’re entering uncharted territory where multiple safe havens will compete for the same frightened money, and the results will be brutal for anyone still trading yesterday’s correlations.

The Yen Explosion Nobody Sees Coming

The Japanese Yen is sitting on the biggest powder keg in currency markets. While everyone’s obsessing over Fed policy and dollar strength, they’re missing the massive carry trade unwind that’s building like a tsunami. When this thing breaks, JPY isn’t just going to strengthen — it’s going to absolutely demolish every other currency in its path. We’re talking about years of accumulated leverage getting unwound in weeks, maybe days.

The beautiful part? Most retail traders still think of the Yen as that “boring” currency that barely moves. They have no idea what’s about to hit them. When USD/JPY starts its real descent — not these little 100-pip corrections we’ve been seeing — it’s going to create opportunities that don’t come around but once every few years. The smart money is already positioning, but the herd is still chasing yesterday’s trends.

Gold’s Final Awakening

Gold has been the ultimate head-fake for the last two years. Every time it looked ready to break out, something came along to knock it back down. But that’s exactly what makes this setup so perfect. The weak hands are gone, the momentum chasers have moved on to crypto and tech stocks, and now we’ve got a clean slate for the real move.

When the USD weakness finally accelerates and central banks realize their inflation fight isn’t over — it’s just getting started — gold is going to wake up like a bear coming out of hibernation. Hungry, angry, and ready to make up for lost time.

The institutional money that’s been sitting on the sidelines watching stocks run will need somewhere to park when reality hits. Bonds? Maybe for a minute. But when the debt ceiling drama starts up again and fiscal sanity becomes a distant memory, precious metals will be the only game in town.

The Treasury Trap

U.S. Treasuries will get their bounce — I’m not arguing that. When stocks start puking, the knee-jerk reaction will send money flooding into the “safety” of government debt. But here’s the thing: it’s a trap. The Treasury market is being propped up by the same financial engineering that got us into this mess in the first place.

The real question isn’t whether bonds will catch a bid during the initial panic. It’s what happens after. When investors realize that owning paper yielding 4% while real inflation runs at 8% is a guaranteed way to lose purchasing power, the rotation out of Treasuries and into real assets will be swift and merciless.

Trading the Chaos

The key to profiting from this mess is understanding that the correlations everyone relies on are about to break down completely. You might see gold and the dollar rise together. You might see bonds sell off while stocks crater. The metal moves that have been building in silence are about to explode into the mainstream.

Position sizing becomes everything in this environment. The moves are going to be violent in both directions, and the traders who survive will be the ones who can stomach the volatility without getting shaken out. We’re not talking about your typical 2% daily ranges anymore — we’re entering an era where currencies can gap 5% overnight and keep moving.

The smart play? Start building positions now while everyone’s still focused on the noise. The correction everyone’s calling for is already underway in the currency markets. By the time it shows up in your favorite stock index, the best opportunities will be long gone.

Silver And Gold – Is Now The Time To Buy?

Forex Kong 17 Comments

The question has never really been “Kong – should I buy gold?” but more so “Kong – WHEN should I buy gold?”

The long-term fundamental case for owning gold and silver is as solid today, as it will be tomorrow – and as it’s always been. You can’t go wrong owning silver and gold  “if” – you’ve got a long enough profit horizon.

Up until now, gold and silver haven’t been a “trade” as the metals have “generally” fallen like mad, and sat consolidating in range for what feels like eternity. Silver is just a touch lower than the price a full 6 months ago. For the most part when any asset consolidates for this kind of “extended period” the move “out of this consolidation” is usually quite powerful. Very powerful.

In fact, in this case it’s very likely that the first move upward in both gold and silver will be so fast, and likely so large – that anyone who “wasn’t already in the trade” will be left chasing. Not to say that “you’ll miss the boat” as the PM’s (precious metals) have miles of upward potential – just that…..you may be looking to buy “EXK” for example at 7 dollars – as opposed to getting started, down here around 4 bucks.

We are very close to where I would suggest “starting to build positions”, and I feel that the “miners” will provide the largest “bang for your buck”.

Forex_Kong_EXK_Silver_Gold_Nov

Forex_Kong_EXK_Silver_Gold_Nov

It doesn’t matter which “silver miner” you look at as…the charts all look more or less exactly the same. I like EXK as a “trading vehicle” to make a play in the space – but a pile of others will also move in tandem when the PM’s move.

Check out “GPL” for a super low value play – currently trading at .76 cents!

The Dollar Debasement Trade: Why PM Miners Are Your Best Leverage Play

USD Index Breakdown Sets the Stage

The DXY has been painting a picture that screams “weakness ahead” for anyone paying attention. We’re looking at a currency that’s been propped up by nothing more than central bank jawboning and the illusion of relative strength. But here’s the thing – when you’re printing money faster than a Zimbabwean central banker, that strength is purely temporary. The Fed’s balance sheet expansion hasn’t stopped, it’s just slowed down temporarily. Every time they pause, every time they hint at “data dependency,” they’re just setting up the next wave of debasement. And when that wave hits, you want to be positioned in hard assets – specifically the miners that’ll give you 3-to-1 leverage on the underlying metals move.

Look at EUR/USD, GBP/USD, even AUD/USD – they’re all coiling up against the dollar like springs ready to explode higher. The dollar’s artificial strength is creating the exact setup we need for precious metals to absolutely rocket. When DXY breaks down through that 100 support level, and it will, gold and silver won’t just move – they’ll gap up so fast it’ll make your head spin. That’s why getting positioned in miners like EXK now, while they’re still cheap, is critical timing.

Real Interest Rates: The Hidden Driver Nobody’s Watching

Here’s what the mainstream financial media won’t tell you – real interest rates are still deeply negative, and they’re about to get worse. When you subtract actual inflation from nominal rates, you’re looking at negative 2-3% real yields. That’s free money for holding gold. Every month this persists, every month the Fed pretends inflation is “transitory” while it runs hot, you’re getting paid to own precious metals. The bond market knows this – just look at the yield curve flattening. When long-term rates can’t rise because the government can’t afford higher debt service costs, and short-term rates are artificially suppressed, gold becomes the only real store of value.

The miners amplify this dynamic perfectly. When gold moves from $1950 to $2200, EXK doesn’t move 13% – it moves 40-50%. That’s operational leverage working in your favor. These companies have fixed costs and variable revenues tied to metal prices. Small moves in the underlying create massive moves in the equity. And we’re not talking about small moves anymore – we’re talking about a structural shift that could take gold to $2500+ and silver back toward $35-40.

Global Currency Wars Accelerating

Every major central bank is in a race to debase faster than their competitors. The ECB is buying bonds, the BOJ is pegging yields, the PBOC is easing credit conditions – it’s a coordinated assault on fiat currencies worldwide. This isn’t just about the dollar anymore. When you’re looking at EUR/JPY, GBP/CAD, AUD/NZD – all these crosses are becoming increasingly volatile because no one trusts any paper currency to hold value long-term. That’s the perfect environment for precious metals to reassert themselves as the ultimate currency hedge.

The smart money is already positioning. Central banks bought over 650 tons of gold last year – the highest since 1971. They know what’s coming. China’s been accumulating, Russia’s been accumulating, even traditionally dollar-friendly nations are diversifying reserves. When institutions with trillion-dollar balance sheets are buying physical metal, you better believe the miners are going to follow.

Technical Setup Screaming “Coiled Spring”

From a pure chart perspective, we’re looking at textbook consolidation patterns across the entire mining sector. These aren’t just random sideways moves – they’re accumulation zones where smart money builds positions before explosive moves higher. The volume patterns, the support levels holding, the way these stocks refuse to break down despite broader market weakness – it all points to massive buying underneath current prices. When this consolidation breaks, and the technicals suggest it’s imminent, you’ll see gap-up opens that leave retail investors scrambling to chase at much higher prices.

GPL at 76 cents is practically giving shares away. EXK under $5 is a gift. These aren’t speculative plays – they’re value investments in a sector that’s about to experience a fundamental revaluation. The time to build positions is now, before the breakout makes these entry points nothing but a memory.

Gold Priced In USD – Invest Don't Trade

Forex Kong 5 Comments

It remains to be seen as to what kind of “legs” this USD rally may have, and it’s implications with respect to the price of gold.

We’ve been over the “theory” as to why the Fed would prefer a lower price in gold as the US Dollar devaluation continues, but of course that’s all it’s been – theory. I fully understand the “short selling” in the paper market by Ben’s friends on the street, but to consider some kind of “global conspiracy” to keep the price “in line” with a sliding US Dollar would be a stretch for sure.

Looking at recent price movement we are “once again” in a position where both the U.S Dollar as well as gold have been falling together ( more or less ) where as just today, a decent “inverse” move with the dollar up and gold down another 17 bucks.

The analogy of “turning around a big cruise ship” as opposed to a motor boat comes to mind in that….these things play out day-to-day but are really moving on a much larger scale over a much longer period of time – and it does take time to turn that ship around. More time than most traders can bear.

It’s my view that anyone “building positions” in the precious metals around this area of price and time ( and lower ) shouldn’t really get into “to much trouble” looking longer term. It’s certainly not a trade, and it’s a big, big boat to turn so….weather or not you can take/manage the drawdown and slug it out is always a matter of ones personal trading / account / exposure / leverage etc…

Looking at specific “price levels” in an attempt to “nail it” on an asset worth 1300.00 bucks is a fools game, as fluxuation’s of 50 bucks here and there would apear normal ( % wise ) when trading “anything” of lesser value.

Hang in there is about all you can do.

The Dollar’s Deceptive Rally: Reading Between the Lines

Central Bank Coordination and Market Reality

What we’re witnessing isn’t just some random USD strength – it’s coordinated policy action disguised as market forces. The Fed’s communication strategy has shifted dramatically, and smart money recognizes this pivot long before retail traders catch on. When you see simultaneous moves in DXY, EUR/USD, and GBP/USD that align perfectly with Treasury auction schedules, you’re not looking at organic price discovery. You’re watching institutional coordination at its finest. The question isn’t whether central banks influence these markets – it’s how effectively they can maintain the illusion of free market pricing while engineering the outcomes they need.

Consider the timing of recent dollar strength against the backdrop of deteriorating economic fundamentals. Real yields remain negative, debt-to-GDP ratios continue expanding, and yet the greenback rallies. This disconnect doesn’t happen by accident. It happens because the alternative – a collapsing reserve currency – threatens the entire global financial architecture. Every major central bank has skin in this game, whether they admit it publicly or not.

Technical Levels That Actually Matter

Forget the pretty lines on your charts for a moment and focus on the levels that move institutional money. In EUR/USD, we’re approaching critical support around 1.0500 that represents more than just technical significance – it’s the threshold where European exporters begin serious hedging programs. Break below this level and you trigger algorithmic selling programs worth billions. Similarly, USD/JPY strength above 150.00 isn’t just a round number – it’s where the Bank of Japan historically draws lines in the sand.

Gold’s relationship with these currency moves reveals the real story. When gold drops $50 while the dollar index gains 200 points, you’re seeing leveraged positions getting liquidated across commodity trading advisors and hedge funds. These aren’t fundamental moves – they’re mechanical responses to risk management algorithms. The smart money waits for these liquidation events to establish positions, not to chase them.

The Precious Metals Accumulation Game

Here’s what the institutions understand that retail traders miss: gold isn’t trading on supply and demand fundamentals right now. It’s trading on dollar liquidity flows and systematic fund rebalancing. When pension funds and sovereign wealth funds rebalance quarterly, they don’t care about $20 or $30 price differences in gold. They care about strategic allocation percentages and long-term purchasing power preservation.

The current weakness in precious metals creates opportunity for those thinking beyond next week’s price action. Central banks globally continue accumulating gold at record pace, but they’re not buying on margin or sweating daily volatility. They understand that currency debasement is a mathematical certainty, regardless of short-term dollar strength. The timeline for this realization to hit broader markets isn’t months – it’s years. Position accordingly or don’t position at all.

Risk Management in Volatile Currency Regimes

Managing exposure in this environment requires abandoning traditional forex thinking. Currency correlations that held for decades are breaking down as policy divergence accelerates. The old playbook of buying USD strength against commodity currencies doesn’t work when those same commodity producers are actively diversifying away from dollar reserves. Similarly, using gold as a simple dollar hedge misses the complexity of modern monetary policy coordination.

Professional traders are shifting toward position sizing based on volatility regimes rather than traditional risk-reward ratios. When daily moves in major currency pairs exceed historical monthly ranges, your position sizing methodology needs updating. The math that worked in low-volatility environments will destroy accounts in high-volatility regimes. This isn’t about being more conservative – it’s about being more intelligent with leverage and exposure timing.

The bottom line remains unchanged: those building strategic positions in hard assets around current levels are positioning for monetary policy realities that haven’t fully manifested in market pricing yet. Whether you can stomach the interim volatility depends entirely on your time horizon and position sizing discipline. The cruise ship analogy holds – just make sure you’re not using speedboat position sizes while waiting for the turn.

Gold And Silver – Manipulation Explained

Forex Kong 12 Comments

If you’re having trouble accepting the general idea that the U.S Federal Reserve will continue its assault on the U.S Dollar ( devaluing USD providing considerable relief to the current government debt obligations) then I can’t imagine you’ll be particularly thrilled with the following breakdown on gold and silver.

There is no greater enemy to the Fed than a rising price in gold or silver.

Against a backdrop of such extreme money printing and currency devaluation in the U.S, if left to reflect its true value” (as we’ve seen with respect to the price of gold priced in Yen)  the price of gold would now be significantly higher – and I mean SIGNIFICANTLY HIGHER than we see reflected in the current “paper market”.

When ever Uncle Ben gets nervous about the price creeping higher, he simply calls his buddies at JP Morgan, sends them a couple suitcases of freshly printed U.S toilet paper and POOF!

JP Morgan piles in even further “short” (via naked short contracts placed at the CME / COMEX) and the “paper price” continues to flounder/move lower. Ben keeps printing useless fiat paper – and the continued “illusion of prosperity” runs across televisions country-wide.

As I understand it ( and please forgive me if I’m way off ) there is considerably more silver/gold current sold “short” than physical / actual metal currently “above ground” on the entire planet Earth, and as informed investors now look to take “actual delivery” of the physical as opposed to just “trading in the paper market” we are about to see some serious fireworks.

Many heavy hitters have already suggested that The Comex may soon be looking at default. (CME Group is the largest futures exchange in the world. Many commodities, of which gold is one, are traded on this exchange. The gold exchange – which is often still referred to as the Comex, its original name prior to being bought by the CME – is the largest gold exchange by volume in the world).

Take it for what it’s worth as JP Morgan is now under investigation by the FBI and other authorities – this all may fall into the category of “conspiracy theory” if one chooses to just bury their head in the sand. 

Your head would absolutely spin if we jump up another “rung on the ladder” to discuss the London Bullion Markets, The Bank of International Settlements and The Fractional Gold System – let alone where China fits in.

The Currency War Battlefield: Where Gold Meets Forex Reality

China’s Strategic Gold Accumulation and USD Displacement

Let’s talk about the elephant in the room that makes central bankers lose sleep at night. While the Fed continues its monetary circus act, China has been quietly accumulating physical gold at an unprecedented pace. The People’s Bank of China isn’t just buying gold for diversification – they’re building the foundation for a post-dollar global reserve system. Every month, China adds hundreds of tons to their official reserves, and that’s just what they’re willing to report publicly. The real numbers are likely staggering.

This isn’t happening in a vacuum. The BRICS nations are actively working to circumvent the SWIFT system and establish alternative payment mechanisms that bypass the dollar entirely. When major economies start conducting bilateral trade in their own currencies, backed by physical gold reserves, the dollar’s reserve status becomes nothing more than a historical footnote. The forex implications here are massive – we’re looking at a fundamental restructuring of global currency relationships that will make the Plaza Accord look like a minor adjustment.

The Derivatives Time Bomb and Currency Volatility

Here’s where things get really interesting from a forex perspective. The precious metals manipulation we’ve discussed is intricately connected to the broader derivatives market that underpins modern currency trading. JP Morgan and other major banks aren’t just short gold and silver – they’re leveraged to the hilt across multiple asset classes, including massive positions in currency derivatives.

When the physical delivery squeeze finally hits the metals market, it won’t just affect gold prices. The same institutions manipulating precious metals are the primary market makers in major forex pairs like EUR/USD, GBP/USD, and USD/JPY. A liquidity crisis in one market creates contagion effects across all markets. We’re talking about counterparty risk that makes 2008 look like a warm-up act. The interconnected nature of these derivative positions means that when one domino falls, the entire currency system faces systemic risk.

Interest Rate Theatrics and the Coming Dollar Collapse

The Federal Reserve is trapped in a corner of their own making, and every forex trader needs to understand this dynamic. They can’t raise rates meaningfully without triggering a sovereign debt crisis, and they can’t keep them artificially low without completely destroying the dollar’s credibility. This is the classic definition of checkmate in monetary policy.

Real interest rates – accounting for actual inflation, not the government’s manipulated CPI figures – are deeply negative. This creates a feedback loop where foreign central banks and sovereign wealth funds start questioning why they’re holding dollars that are guaranteed to lose purchasing power. When major holders like Japan, Saudi Arabia, or European central banks begin diversifying away from dollar reserves in earnest, the currency markets will experience volatility that makes previous crises look tame.

The technical patterns in DXY are already showing signs of long-term weakness, despite short-term rallies driven by relative weakness in other fiat currencies. But when your competition is other collapsing fiat currencies, being the “best of the worst” isn’t exactly a sustainable long-term strategy.

Trading the Transition: Positioning for Monetary Reset

Smart money isn’t waiting for official announcements or policy changes – they’re positioning now for what’s mathematically inevitable. The currency pairs to watch aren’t just the traditional majors anymore. Pay attention to how emerging market currencies with strong commodity backing are performing against the dollar. Countries with significant gold reserves, energy resources, and minimal debt-to-GDP ratios are setting up to be the winners in this transition.

The Swiss franc, despite Switzerland’s attempts to weaken it, continues to show underlying strength because of the country’s gold reserves and fiscal discipline. The Norwegian krone benefits from energy resources and a sovereign wealth fund. Even the Russian ruble, despite sanctions, has shown remarkable resilience due to gold backing and energy exports.

The endgame here isn’t subtle – we’re witnessing the controlled demolition of the Bretton Woods system’s final remnants. The question isn’t whether this transition will happen, but how quickly and chaotically it unfolds. Position accordingly, because when this dam breaks, there won’t be time to react.

Gold And The Dollar – What's Next?

Forex Kong 5 Comments

If you consider the massive easing / devaluation of the Japanese Yen some months ago, and put yourself in the shoes of an average Japanese investor waking up,  morning after morning – only to see the price of Gold  (priced in Yen of course ) going through the roof,  you’d almost think you’d entered the Twilight Zone.

This doesn’t make any sense! I thought the price of Gold was going down, down down. What gives?

When traded “against” a currency that is rapidly losing it’s value ( via rapid printing / easing such as the methods currently being used by the U.S Fed) , it only makes sense that a hard asset ( such as Gold) which cannot be duplicated/printed/ reproduced “should” rise in value substantially – as in the simplest sense – you’ll need a whole lot more of that “local currency” in order to purchase it right?

The example seen in Japan is exactly what one would expect to see  – when a currency is rapidly debased in value, and then compared / traded against something that “cannot” be artificially created. Currency value down = Gold price up.

So what the hell has been going on in the U.S then? Why do I see the value of Gold taken to the cleaners AS WELL my USD / purchasing power getting smashed? How can this be?

How can this be you ask? How can this be?

………………………to be continued.

The Fed’s Manipulation Game: Why Gold Gets Crushed Despite Dollar Debasement

Paper Gold Markets vs Physical Reality

Here’s the dirty secret Wall Street doesn’t want you to understand: the gold market you see quoted every day isn’t driven by physical demand or supply fundamentals. It’s controlled by paper derivatives trading at volumes that dwarf actual gold production by astronomical margins. While Japanese investors are buying physical gold hand over fist as their Yen crumbles, the Western gold market operates in a completely different universe. Futures contracts, ETFs, and options create artificial supply that can be conjured up with a few keystrokes. When the Fed needs to suppress gold prices to maintain confidence in their dollar printing operation, they don’t need to find actual gold – they just flood the paper markets with sell orders through their primary dealer network.

The COMEX alone trades paper gold equivalent to multiple years of global mine production every single month. This isn’t a free market – it’s a controlled demolition designed to keep precious metals from exposing the true extent of currency debasement happening in real time. Every time gold threatens to break higher and signal danger about dollar purchasing power, mysterious massive sell orders appear during thin trading hours, particularly during Asian sessions when US traders are asleep.

Interest Rate Manipulation and Opportunity Cost Theater

The Federal Reserve has weaponized interest rates not just to control borrowing costs, but to create artificial opportunity costs for holding non-yielding assets like gold. When they jack up rates to 5%+ while simultaneously continuing quantitative easing through the back door, they create a psychological trap for retail investors. The average trader sees higher yields on Treasury bills and thinks gold is dead money. But this completely ignores the fact that real interest rates – after accounting for actual inflation – remain deeply negative.

Meanwhile, currency traders watching EUR/USD, GBP/USD, and other major pairs are seeing coordinated central bank intervention designed to make the dollar appear strong relative to other fiat currencies. But here’s the kicker: when all major currencies are being debased simultaneously, comparing them to each other is like comparing different flavors of garbage. The USD/JPY pair shooting higher doesn’t mean the dollar is strong – it means the Yen is being destroyed faster than the dollar. Smart money understands this distinction.

The Petrodollar System’s Last Stand

Gold’s suppression isn’t just about maintaining confidence in the dollar domestically – it’s about preserving the entire petrodollar recycling system that has allowed the US to export inflation globally for decades. When oil-producing nations start questioning why they should accept increasingly worthless paper dollars for their finite energy resources, gold becomes the obvious alternative. Every spike in gold prices sends a signal to OPEC nations and other commodity exporters that maybe, just maybe, they should demand something more substantial than Federal Reserve Notes.

The recent Saudi Arabia discussions about accepting Chinese Yuan for oil payments sent shockwaves through Washington precisely because it threatens this arrangement. If major energy exporters start accumulating gold instead of US Treasury bonds, the Fed’s ability to print unlimited dollars without immediate domestic inflation consequences disappears overnight. This is why gold suppression isn’t just monetary policy – it’s national security policy.

The Endgame: When Physical Demand Overwhelms Paper Supply

But here’s where things get interesting for forex traders paying attention to cross-currency flows and central bank reserve compositions. The divergence between paper gold prices and physical demand is reaching breaking point. While Western paper markets suppress prices, Eastern central banks – particularly China, Russia, and India – continue accumulating physical gold at unprecedented rates. These aren’t speculative trades; they’re strategic moves to reduce dollar dependency.

When this paper charade finally breaks down, the repricing won’t be gradual. Currency markets will see violent moves as traders rush to exit dollar-denominated assets and seek real stores of value. The USD/Gold relationship will snap back to fundamental reality with the same force we witnessed in the 1970s, but potentially much more severe given the exponentially larger money supply base today.

For sharp-eyed forex traders, the key isn’t just watching gold prices – it’s monitoring the premium differences between paper and physical gold across different geographic markets. When those spreads start widening dramatically, particularly in Asian markets, that’s your signal that the manipulation game is losing effectiveness and real price discovery is about to return with a vengeance.

Should I Buy Gold Kong?

Forex Kong 6 Comments

I get this question a lot – a whole lot. Should I buy gold? Is gold going back up?

Interestingly, if you zoom out to a much longer time frame chart (maybe a weekly and even a monthly chart) you’ll see that Gold has suffered recently – yes…..but is “still” in an uptrend (pending it slows down and looks to reverse in and around this area sometime soon).

I would have to consider 1155.00 as a level of considerable importance and significance.

But please keep in mind (as we’ve discussed with respect to long-term charts) that turns on a weekly chart can take “literally” weeks, and weeks to stop then consolidate and finally turn to reverse course. Even at that ( considering we are looking at an asset that costs 1190.oo dollars) a hundred dollars here, a hundred dollars there – these aren’t “large swings” percentage wise. Putting an exact number on it is a fools game.

More important than the question of “should I buy gold?” would be the matter of “how do I buy gold?”

Don’t charge in there looking to call it a “trade” as you’ll likely miss on nailing an entry, but rather “build” a position over time “smoothing out” this volatility and not sweating the 50 buck swings.

Patience is your greatest asset here. You really can’t rush this one.

Building Your Gold Strategy in Today’s Macro Environment

Dollar Strength and the Gold Correlation Dance

Here’s what most retail traders completely miss when they’re asking about gold – they’re not looking at the bigger picture. The DXY (Dollar Index) and gold have this inverse relationship that’s been rock solid for decades, but it’s not a simple one-to-one correlation. When the dollar strengthens significantly, gold gets hammered. When dollar weakness creeps in, gold finds its legs again. Right now, we’re in this interesting spot where the Fed’s monetary policy is creating some serious cross-currents. The dollar has been flexing its muscles, but smart money knows this can’t last forever. Watch EUR/USD, GBP/USD, and especially USD/JPY – when these major pairs start showing consistent dollar weakness, that’s your signal that gold might be ready to make its next major move higher.

The Central Bank Put and Inflation Reality

Let’s talk about something the mainstream financial media won’t tell you straight. Central banks around the world have been net buyers of gold for over a decade now. China, Russia, India – they’re stockpiling this stuff like their currencies depend on it, because frankly, they do. The Federal Reserve can talk tough about inflation fighting, but when push comes to shove and the economy starts cracking, they’ll pivot faster than a day trader chasing a breakout. That’s the central bank put, and it’s gold’s best friend. Real inflation – not the manipulated CPI numbers they feed the public – is still running hot in energy, food, and housing. Gold is the ultimate hedge against currency debasement, and every major economy is debasing their currency through money printing. This isn’t theory; it’s monetary reality.

Position Sizing and Risk Management for Gold Exposure

Now let’s get practical about how you actually execute this without blowing up your account. First, forget about trying to trade gold like you would EUR/USD or GBP/JPY. Gold moves in cycles measured in months and years, not days and weeks. Your position sizing should reflect this reality. I’m talking about allocating maybe 5-10% of your total portfolio to gold-related positions, and then scaling in over time. You can get exposure through spot gold, gold futures, or even currency pairs like AUD/USD and NZD/USD which have decent correlations to gold movements since Australia and New Zealand are major gold producers. The key is spreading your entries across multiple price levels. If you’re looking at that 1155 level I mentioned as significant support, don’t blow your entire allocation there. Scale in at 1180, 1165, 1155, and maybe even 1140 if we get that low. This way, you’re not trying to be a hero and nail the exact bottom.

Reading the Macro Tea Leaves

The smart money is watching several key indicators that most retail traders ignore completely. First, watch the yield curve, specifically the 2-10 spread. When this starts steepening after being inverted, it often signals that deflationary pressures are ending and inflationary pressures are building – that’s gold-positive. Second, keep an eye on real interest rates, not just nominal rates. If 10-year Treasury yields are at 4% but real inflation is running at 5%, you’ve got negative real rates, which is rocket fuel for gold. Third, watch the commodity complex broadly. When crude oil, copper, and agricultural commodities start moving higher together, it’s usually signaling a broader inflationary wave that will eventually lift gold. The bond market is smarter than the stock market, and the commodity markets are smarter than both when it comes to sniffing out real economic trends. Pay attention to what these markets are telling you, and position accordingly in gold when all the signals start aligning.