Since dropping below $1800/oz during the last few days in January, gold has risen sharply over the first three weeks of February 2022 and ended right at $1900/oz on Friday February 18, 2022. Gold might finally be looking to break out even further as the world gets set to face the consequences of government currency printing and debt accumulation experienced since the Covid lockdowns began.
When the majority of the major government’s all decided to shut down the world due to the virus in March of 2020 most markets, including gold, took a short but aggressive nose dive. Leading up to the shutdown announcements gold had been steadily increasing reaching $1700/oz which was the highest it had been since retreating from its peak of above $1800 in July 2011 on the heels of the last major financial disaster. Since then gold had found a new normal most commonly trading between $1200 and $1500. From July 2018 to early March 2020 gold had seen a consistent rise in price going from $1200 to the $1700 level. Many Austrian economists believe that rise to be caused by the Fed quantitative easing policies and substantial debt increase by the Treasury department over the prior decade.
The initial sell off caused by the shut down announcements brought gold back to right below $1500/oz, however this was short lived as gold quickly rebounded from a low hit around March 8 to a high of $2,036 (give or take) on July 26, 2020. Many long term gold investors believed in the summer of 2020 that gold had nowhere to go but up as the recent stimulus checks that governments were providing citizens with would only add fuel to the fire originally lit by increased government expenditures experienced during the prior decade. Surprisingly to some, gold saw a steep sell off from its high in July of 2020 that lasted through February 2021. Over the last year gold has gone back and forth, unable to reach its previous high as it traded between $1700 and $1850 from February 2021 through January 2022. The recent break out to $1900 in February 2022 suggests that gold might be picking up where it left off in July 2020 and reach new a new all time high in the coming months.