Gold retreats after bumping against $1950 level in overnight trading
Dalio says dollar-dominated world order and globalized economy are ‘fading away’

(USAGOLD – 1/26/2023) – Gold retreated after bumping against the $1950 level in overnight trading. It is down $11 this morning at $1938. Silver is down 21¢ at $23.80. A key factor in gold’s pricing of late has been the return of hedge fund interest. “Hedge funds meanwhile have been near constant buyers since early November,” writes Saxo Bank’s Ole Hansen in a report issued earlier this week, “and during this time the net long has jumped from a 3.9 million ounce net short to a 9.3 million ounce net long, a nine-month high.” With greater hedge fund involvement in play, we should not be surprised at increased volatility and technical trading at key chart numbers.

Ray Dalio, who founded the world’s largest hedge fund, says the world order is shaping up in ways similar to the pre-World War II era, with “each country’s populism and nationalism growing in preparation for greater conflicts.” In the process, he says in an article on the Modern Diplomacy website, “the era of a ‘dollar-dominated world order and a globalized economy was ‘fading away.’ We are now going to have the major powers and their allies form economic, currency, and military blocs.” Mature economies, he says, “have run up very large debts and have developed a dependence on their central banks to print money to buy the government debts,” he said. The increase in debt monetization “will mean that holders of debt assets will get bad inflation-adjusted returns.” Dalio is a long-time advocate of gold ownership.

Gold and silver prices
(October 2022 to present)

Chart courtesy of TradingView.com