It is increasingly clear that events beyond the United States borders will play an important role in defining the trends over the next few weeks for the precious metals and currency markets.
Of course, the international perspective is a critical component of the long-term thesis for precious metals throughout this macro cycle. During the 1970’s, when gold rose over 2,000% between President Nixon’s breaking of the Bretton Woods accord in 1971 and its subsequent peak in 1980, the bull market was mostly a US dollar-driven event. Dollar-holders turned in their greenbacks en masse, causing the price of gold to rise.
In contrast, the current backdrop for the metals has the potential to be even more powerful than in the 1970’s precisely because we now see a worldwide case for precious metals ownership.