Christopher Aaron: Could Trump End the Federal Reserve System?
Nov 13, 2024
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Christopher Aaron, founder of iGold Advisor and senior editor for Gold Eagle, provides keen insights on market cycles and gold investments. He discusses the market's reaction to recent U.S. elections and Fed meetings, warning investors about resistance levels for gold. Aaron explores the implications of Trump's presidency, including Ron Paul's ideas on the Federal Reserve and potential tax cuts. He emphasizes a broader investment perspective beyond precious metals, while highlighting trends in the gold to silver ratio and the impact of technology on future investments.
Current market sentiment has shifted due to the recent election, significantly affecting gold prices and cautioning investors against abandoning precious metals entirely.
The Dow to gold ratio chart reveals critical resistance levels that may indicate a potential downturn for gold as the stock market appears favored.
Emerging investment opportunities in energy, industrial metals, and technology suggest that diversifying beyond precious metals could align with broader economic advancements.
Deep dives
Market Sentiment and Gold's Future
Current market sentiment has shifted after recent election results, impacting risk-on assets and causing gold prices to drop significantly. Observing the historical context, when Trump last won, a similar pattern saw the stock market rise while gold fell sharply, indicating a strong pro-growth sentiment. Despite gold's impressive threefold increase from just above $1,000 to close to $3,000 over the past nine years, there’s emerging resistance around the $3,000 mark that warrants caution. Investors are advised to reassess their positions, considering the changes in sentiment and reality in the broader financial landscape.
The Dow to Gold Ratio Insights
The Dow to gold ratio chart indicates a historically significant converging triangle that could break decisively in one direction. A crucial level around 18.45 has been defined, which if surpassed, would signal a continued upward trend for the Dow and a potential downturn for gold. Past patterns from Trump's previous election outcomes reveal a 25% outperformance of the Dow compared to gold, suggesting that current trends might favor the stock market once again. The impending breakthrough could lead to a decisive shift in market dynamics, stressing the importance of understanding these technical signals.
Silver's Relative Performance
The gold to silver ratio remains an important indicator of market sentiment, with the current trend indicating a stronger preference for gold over silver. Historical analysis shows a strong correlation between key breaks in this ratio and subsequent bull markets in silver, exemplifying its speculative allure. However, recent behavior has revealed a concerning false breakdown in this pattern, indicating a potential ongoing preference for gold despite expected fundamentals favoring silver. Thus, investors should approach silver with caution as speculative interest may not materialize in the near term as previously anticipated.
U.S. Dollar Strength and Its Implications
The strengthening U.S. dollar post-election signals a potential headwind for gold and silver prices, reinforcing market expectations of continued growth. Despite concerns about inflation and rising national debt, charts indicate the dollar's long-term upward trend against other fiat currencies, challenging predictions of its imminent collapse. The key takeaway is that primary market realities, such as the dollar's robust performance, are outweighing traditional concerns about deficit and inflation for now. Investors should remain vigilant about these trends as they could significantly affect their positions in precious metals.
Exploring New Investment Opportunities
Emerging sectors such as energy, industrial metals, and advanced technologies present intriguing investment opportunities in contrast to gold's current market challenges. The conversation around potential tax cuts and deregulation under a new administration suggests possibilities for economic rejuvenation that could drive significant growth. Additionally, innovations in space exploration and technology are seen as potential catalysts for long-term investment opportunities. Investors are encouraged to maintain a diversified portfolio while being open to new sectors that align with broader economic trends and advancements.
Tom Bodrovics welcomes back Christopher Aaron, founder of iGold Advisor and senior editor for Gold Eagle, for a discussion about market sentiment towards gold post-U.S. election results and the Federal Reserve meeting. Aaron shares his perspective on market cycles and warns investors about potential resistance levels for gold while expressing caution against abandoning precious metals entirely due to unforeseen circumstances.
They explore the impact of the U.S. election, Fed meeting, Trump presidency, and the Dow to Gold ratio on markets, emphasizing the significance of considering both present situations and future developments. Aaron also discusses his analysis of the gold to silver ratio chart, focusing on trends and their implications for investors, and the potential implications of Elon Musk's involvement in Trump's administration on reducing the U.S. government.
Chris also discusses Ron Paul's advocacy for ending the Federal Reserve System and the possible significance of his inclusion in Trump's administration, as well as the expected timeline for tax cuts and regulatory changes under the new administration and broader themes for the next decade. Throughout the conversation, they encourage listeners to broaden their perspectives and consider various markets and investments beyond precious metals.
Time Stamp References:0:00 - Introduction0:50 - Sentiment & Gold8:50 - Fundamentals & Possibility12:50 - Dow To Gold Chart19:50 - Gold To Silver Chart28:52 - Dollar Index & Outlook34:00 - Energy & Mkt. Direction46:50 - End The Fed?50:08 - Tax Cuts & Timeframes52:10 - Space Exploration59:08 - Concluding Thoughts
Guest Links:Twitter: https://twitter.com/iGlobalGoldWebsite: https://igoldadvisor.com/YouTube: https://www.youtube.com/channel/UCjG_4Kg7ZWWs8o7EnfnDc9Q
Talking Points From This Episode
Aaron warns investors about potential resistance levels for gold while emphasizing the importance of not abandoning precious metals entirely.
U.S. election results, Federal Reserve meeting, Trump presidency, and Dow to Gold ratio impact markets, with both present situations and future developments significant.
Analysis of gold to silver ratio chart reveals trends and implications for investors, and Elon Musk's role in Trump's administration could potentially reduce the U.S. government debt.
Christopher Aaron is Senior Editor for the precious metals investment portal Gold Eagle.
A former counter-terrorism officer for the CIA and Department of Defense, Christopher has always had an independent analytical outlook. He volunteered to serve two tours to Iraq and Afghanistan from 2006 - 2009, conducting pattern analysis and mapping for the US Intelligence Community in Washington, DC. Drawing upon his investigative background, he turned attention to the financial markets in the early 2000s.
Mapping shares similarities with technical analysis of the financial markets because both involve the observation and interpretation of patterns found in human nature. Through his work, Christopher shares with clients how these patterns are cyclical and embedded. Recognizing these patterns can be used to profit.
Christopher Aaron holds a degree in history and business, with advanced Department of Defense training in intelligence analysis.
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