Gold's big rally has sparked a bearish stock-market signal that hasn't been seen in over 20 years

Photo above - Costco (Costco!!!!) now sells $200 million in gold coins and bars every month, as well as 50 pound bags of dog food and 200 count boxes of Kirkland disposable diapers. Is this a sign of the future, or the end?

There were at least 3 alarmist articles this morning warning about economic Armageddon. I linked to one (below) which claims: “it’s going to be like 2002 all over again”. Another warns 2026 will make 2008 look like a picnic. The third said . . . .

Well, you get the idea. Full disclosure: I’ve been predicting a market disruption/correction/crash since the Obama administration. Because of things like America's national debt, unaffordable housing, and threats to our electric grid. But I’ve not struck it rich yet with these concerns, so take my opinions with a grain of salt.

If (when?) a stock market crash DOES happen, history doesn’t suggest that gold prices will be the trigger. Gold bullion buying is an effect, not a cause. I held several gold mining stocks I bought when gold was $1,200 an ounce. Sold all my shares in 2025 when bullion hit spectacular all-time highs. Now we’re well over $5,500 an ounce, up 20% just this month. Silver is even crazier – up 70% this month, 270% in the past year. Evidently silver at $120 an ounce looks less insane than gold at $5,500?

But where is all this gold and silver money coming from? The stock market is NOT selling off yet. New all-time highs weekly. There was a Bitcoin correction 3 months ago, and crypto has been flat since. Stocks and crypto are probably NOT driving this precious metals bubble. People are not selling real estate to pile into gold either.

That leaves only one obvious source. Are gold bugs selling US Treasurie? Yen bonds, Argentina debt, Brazil, Swiss Francs? Switzerland’s bonds yield only 0.2%. Who the hell wants to own THOSE? (I toyed with the idea of emigrating to Zurich, but their housing is insanely expensive. And they have strict immigration laws).

China and India are doing most of the gold buying over the past year. Poland too. But to be fair, Poland IS constantly being threatened with the next Putin invasion. Poland is possibly Europe’s newest undeclared economic powerhouse: GDP is up 50% since 2020, vs 25% for Germany.

I’m more in awe of China’s grid hacking and space warfare capabilities, instead of their gold reserves. That sort of electronic warfare stuff has the potential to seriously disrupt our paychecks and trigger an inflation spike. But such concerns don't appear to be causing the spike in gold. Its may just be that nobody wants to own dollar denominated debt. Maybe I should sell my Treasury Bill ETFs (exchange trade funds) too? Or will I be late to the party of gold and T Bill lemmings?

ChatGPT, Gemini, and Claude . . . what should I do? Wait, there's another economic article in my in basket this morning. Some investment AI bot lost $250,000 in 3 hours, despite having reviewed 3,000 economic reports.

I’m just sayin’ . . .

https://www.msn.com/en-us/money/markets/gold-s-big-rally-has-sparked-a-bearish-stock-market-signal-that-hasn-t-been-seen-in-over-20-years/ar-AA1VezFh?ocid=msedgntp&pc=HCTS&cvid=697b44fef25b4eff81b4e7c8ed00ed33&ei=66

https://usethebitcoin.com/news/ai-trading-bot-wipes-out-portfolio/

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ArishMell · 70-79, M

It shows how bizarre is the world of currency-trading, but also how panic-driven it is by the big players....

I have only a very small bunch of shares, both issued by and extras I bought from, a former employer. I have hung onto them, neither buying nor selling, and though the annual, after-tax dividend to me is miniscule in shares terms, it has brought me several times my outlay over the years!

One effect of a steep rise in gold price (value??) could be a steep rise in the cost of electronic goods, unless the component manufacturers are very careful to ensure reasonable stable purchasing and stock-holding of gold, silver and other costly metals.

Is this industry behind China and India buying the metal? Commandeering enough of it to protect their electronics manufacturing for a long time to come, while also crippling their rivals in other countries? After all, China now owns most of the world's copper ore deposits.

SusanInFlorida · 31-35, F

@ArishMell silver has many industrial/tech uses. copper too. gold? not so much

whowasthatmaskedman · 70-79, M

One does need to say that this gold/silver (and its even spread to copper) situation is not black and white.Treasuries are being sold off. People are moving out of all types of paper investment into tangeable investments like real estae or precious metals. But there is also a cynical group who are borrowing to buy these things, believing that the debt will be decimated by hyperinflation, leaving them with a profit.. (For the Americans here. Borrow $100K, Buy $100K worth of gold. Watch it inflate to $200K and pay back the $100K loan (or go bankrupt after moving the gold offshore)😷

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whowasthatmaskedman · 70-79, M

@ArishMell That is exactly what is going to happen. But thats the way of all pyramid schemes.. If you think it through, this is exactly the strategy corporate real estate investors have used to buy up large scale land purchases.. Take profits they cant use elsewhere. Borrow more for leverage and buy up big..😷

ArishMell · 70-79, M

@whowasthatmaskedman Interesting! I'd not spotted the pyramid-scheme similarity. So they make piles of cash leaving hundreds more out of pocket. I'm glad I don't know any of those types.

(About forty years ago a friend tried to enlist me in a pyramid-type plan to sell "Amway" household cleaning products; no different from, nor better or worse than, any leading make sold in normal shops. Pyramid schemes had been exposed and banned in the UK about a year previously, so the wholesalers had created a new method under a new name - but it was still a pyramid plan. I declined. A mutual friend later told me he'd tried to recruit her too, also unsuccessfully.)

whowasthatmaskedman · 70-79, M

@ArishMell Actually, its part pyramid, part ponzi. The last people in will be the worst burned, either way. 😷

DogMan · 61-69, M

Yeah it's CRAZY! Same thing with Silver. I paid 1,500.00 per oz for my Gold.

Luckily I bought most of my silver for $13.00 an OZ.

I wish I had bought more....much more.

DogMan · 61-69, M

The demand for silver far outweighs the supply, so I can see why it is going up.

But gold is mostly for jewelry I believe.

YoMomma ·

Well when we have a nuclear war next week..

jackjjackson · M

Usually this pattern result in huge gold and silver selloffs with those seeking safety being screwed.

SusanInFlorida · 31-35, F

@jackjjackson the last big gold selloff was after the 2008-2010 housing crisis. since then, mostly up.

but down today (3%). somebody else is worried too?

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