Last Sunday, we published an article titled "Something strange happened in the gold market! The price of gold may rise to US$10,000 next year." The article mentioned that the best-selling books "Currency War" and "The Death of Currency" The author, Jim Rickards, who has 35 years of experience in Wall Street investment banking and capital markets, believes that central banks around the world continue to print money to avoid financial crises, which will make them run out of ammunition and food, and eventually either trigger hyperinflation or be forced to return to the gold standard. , no matter which one, the price of gold will rise sharply.

And, Jim Rickards believes that the gold price will reach $10,000 per ounce early next year.

He explained that with the United States facing a large amount of debt and other countries selling dollars, the Trump administration may eventually have to take the lead in restarting the monetary system and adjusting the exchange rates between various currencies and the U.S. dollar. Until one ounce of gold is worth $10,000.

Rickards pointed out that a restart of the monetary system is not completely impossible. After the Treaty of Raballo in 1922, the monetary system was restarted eight times in one year. He said: Although the gold price of US$10,000 per ounce seems quite exaggerated at present, consider that in 2002, the gold price was only US$250 per ounce, and nine years later it had increased sevenfold to US$1,900 per ounce. Whether you believe Trump will return to the gold standard or not, you should consider the fact that central banks are buying gold. This is something all investors need to learn.

As Rickards himself believes, the gold price of US$10,000 per ounce is really a super, super, super exaggeration for the current situation. (Note: The current gold price on Tuesday (September 5) is trading at US$1,335.76 per ounce and US$10,000. Obviously, there is a gap between the sky and the earth)

A billionaire from Canada, Eric Sprott of Sprott Asset Management believes that gold prices will rise to $5,000 or even $10,000 per ounce.

Sprott believes that whether it is from the perspective of the U.S. dollar, the Trump administration or the U.S. financial system, it is very necessary to hold gold in the next ten years. It does not sound like the price of gold will increase several times or even reach 10,000 U.S. dollars. So exaggerated.

Because in 2016, the stock market rose by 160% in 6 months, and gold may also repeat this situation. After all, the U.S. dollar has been weak recently and once hit its lowest level in 32 months. Although it has rebounded, it is still below 93.

“Judging from the current financial situation in the United States, it is actually bankrupt. When people realize that this kind of life is unsustainable and their pensions will not be paid, they will wake up.” Sprott said.

When Trump took office, the market had high hopes for him. Because of this, the price of gold fell after the U.S. election last year. However, the market has become increasingly disappointed with the Trump administration. .

“Washington is in chaos and it looks like nothing can be done. Countries will continue to sell dollars, so a multi-fold increase in the price of gold is not as exaggerated as it sounds. The performance of this system today shows that in the next ten years "In this year, it is necessary to hold gold." Sprott agrees with Rickards's view.

Rickards pointed out that it is precisely the large amount of liabilities that makes the U.S. dollar less trusted, and it is reasonable for governments to buy gold to diversify their investment portfolios. In fact, some media have expressed concerns before, and even "Stock God" Buffett has similar views. Specifically:

"I have always believed that precious metals are manipulated by central banks of various countries. Once they can no longer control them, Then precious metals will enter a huge and lasting bull market," Sprott said.

In fact, their predictions are not made randomly, but are based on the following four major trends:

1. The U.S. dollar heading into a bear market

▲U.S. dollar index weekly Trend Chart

Everyone has witnessed how bad the U.S. dollar is. Since the U.S. dollar broke through the historical high of 103.8222 in December 2016, it began a long period of decline for 10 months (still Continue), the current minimum of the US dollar has fallen below 92. Behind the decline of the U.S. dollar is also the trajectory of the market's continued decline in confidence in the U.S. dollar. Neither the Federal Reserve's interest rate hikes nor the steady recovery of the U.S. economy have changed investors' doubts. Selling seems to be the only way forward for the U.S. dollar.

2. Frequent geopolitical risks

Judging from the past two years, geopolitical risks occurred frequently in 2016-2017, such as Brexit, Trump’s election as President of the United States, and North Korea The situation is tense, the situation in the Middle East is unstable, and terrorist attacks in Europe continue. When the above-mentioned events occur, without exception, they cause a huge shock in the market, especially gold, which continues to rise with the help of risks. For example, last Sunday's news that North Korea had successfully tested a hydrogen bomb successfully caused gold prices to rise sharply when the market opened on Monday.

3. The U.S. government has endless problems

With such a maverick president, the U.S. government cannot escape the fate of "problems". It has been nine months since Trump took office, but he has yet to accomplish anything practical that will benefit the U.S. economy. On the contrary, health reform has been postponed again and again, the prospects of tax reform are worrying, intra-party struggles are fierce, and he has been involved in constant scandals. In addition to ordering an air strike on Syria, withdrawing from the TPP, and opposing the Paris Agreement, he seems to only be passionate about building border walls and surfing the Internet. (Tweeted).

The upcoming debt ceiling is another big trouble. What hope can there be for Trump who would rather shut down the government than give up building a wall? By then, investor panic will sweep the market again. No wonder The U.S. dollar is so unpopular.

4. Central banks "grasp" gold reserves

Central banks of various countries reserve gold, but in the past, most countries' gold reserves were stored in the New York Fed. However, in recent years, Germany's continuous shipment of gold back to the country and the US Treasury Secretary's testimony that gold reserves are safe have made the market feel something is wrong, and the "gold conspiracy theory" has become active again. The central bank has shown a tendency to "grasp" gold reserves, which shows that in order to reduce risks, the central bank needs sufficient gold. This signal also brings a reminder to ordinary investors, and the preference for gold will also increase in the future.

The situation in North Korea has become increasingly tense recently. Last weekend, a hydrogen bomb in North Korea directly pushed gold to a yearly high of $1,338 per ounce. At the same time, Bitcoin, which was once so awesome, experienced a flash crash on Monday. Yesterday we mentioned in our article entitled "Just now, the central bank made a big move, the market collapsed instantly, and countless people liquidated their positions." On Monday, the People's Bank of China and seven other departments issued an announcement requiring an immediate halt to all types of token issuance and financing activities. This was like a bucket of ice water suddenly poured into the already boiling cauldron of the virtual currency market. The price of Bitcoin once dropped by nearly 2,000 yuan per coin in 90 minutes, while the prices of other virtual currencies that are more focused on the Asian market, such as Litecoin and Ethereum, fell even more. This situation also makes many speculators complain.

So now, after investors realize the regulatory risks faced by virtual currencies, it is reasonable for traditional safe-haven precious metals to become popular again. On the other hand, the collapse of virtual currencies such as Bitcoin may also mean the beginning of a retreat in the asset market. Industry leaders have long warned that under the heightened negative sentiment at home and abroad, it will be difficult for the United States to continue its bullish trend in September, and that risk aversion is king at the moment, which in fact means that "gold is king." At least, until the "Trump New Deal" is implemented and the global geopolitical situation eases, more funds will be driven into the gold market will be the main theme in the near future.