Market Update August 1

OCM Gold Fund Semi-Annual Shareholder Letter

From our semi-annual shareholder letter:

“The lack of investment interest in gold assets and the strength of the growth-oriented Nasdaq Index, in our opinion, reflects investors’ conviction of a Fed engineered “soft landing”. On the contrary, we believe financial assets versus real assets are in the preliminary stages of a major cyclical turn. The move by resource-based economies to shift away from settling exclusively in USD combined with labor demographics and efforts to re-shore manufacturing in the U.S., in our opinion, forces upward pressure on inflation the market is not anticipating. The prospect of higher inflation and higher rates may become reality investors are not comfortable with.”

Read the full semi-annual shareholder letter here

JP Morgan Sees Gold Charging to Records in 2024 as Fed Cuts Rates

“JPMorgan Chase & Co. sees an opportunity in gold ahead of a likely US recession, predicting prices will push past $2,000 an ounce by year-end and hit fresh records in 2024 as interest rates start to fall.”

“We’re in a very prime place where we think gold ownership and long allocation to gold and silver is something that acts as both a late cycle diversifier and something that will perform as we look to the next sort of 12, 18 months,” said Greg Shearer executive director of global commodities research

Source: Bloomberg

Gohering & Rozencwajg: The US Reserve Currency & Commodities

“What matters is that the move away from the dollar has started. If this trend continues, it would represent the end of the US dollar as the global reserve currency. The writing has been on the wall for a long time, but the change is only occurring now. That is what matters.

Every other period of commodity undervaluation culminated with a shift in global monetary regimes. This time will likely not be different. Proponents of the US dollar argue that no other currency can meet the requirements of a reserve currency. While much talk has centered on the renminbi, China maintains a mostly closed capital account — a clear impediment to a reserve currency.”

Source: Gohering & Rozencwajg Commentary

Gold Futures

Are gold futures poised for a breakout? According to the technical analysis by All Star Charts, there is potential for these higher lows to help gold break out higher.

Source: All Star Charts

China’s H1 gold consumption up over 16%

“China’s gold consumption rose more than 16% year-on-year to 554.88 metric tons in the first half of the year, while output climbed 2.24% to 178.598 metric tons, a report by China Gold Association.”

Source: Reuters

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