Gold’s making exciting and unprecedented moves to the upside. It’s already broken several records in March, and prices aren’t showing any signs of slowing down. Delve into this week’s The Gold Spot to hear Scottsdale Bullion & Coin Sr. Precious Metals Advisor Damian White and Precious Metals Advisor Tim Murphy discuss the push behind gold’s record performance, why experts expect the growth to continue, and why investors should “get along for the ride.”
Gold Keeps Setting New Highs
Gold notched another record on Thursday, securing its strongest month in over three years. The gold spot price closed out the first quarter of the year around $2,235 an ounce on the back of bullish interest rate cuts and surging demand for safe-haven assets. Just last week, we covered a previous record high for gold just above $2,200 an ounce.
Gold Appears Unstoppable. What’s Fueling This Rally?
National Debt Crisis
The mounting US debt crisis has been a primary driver of gold prices as of late. Currently, the national debt stands well over $34 trillion, and the Biden administration just greenlit a $1.2 trillion budget. At this pace, we’re adding another $1 trillion to the debt every 100 days!
Gold is reflecting what the debt is doing. Our national debt is going through the roof.–
The exponential rise in US debt and the political elites’ refusal to change course only encourage people to divest from the USD-linked markets for more stable assets like gold and silver.
Anticipated Rate Cuts
The most recent surges in gold prices have been attributed to the Fed’s confirmation of its plan to cut interest rates. After steadily increasing rates to combat inflation, the financial czars signal three rate cuts throughout 2024. Investors anticipate this intervention will devalue the dollar and dollar-backed assets.
Central Bank Demand
With the US dollar on the decline, foreign countries have been strategically divesting from the greenback and into physical gold bullion. Over the past two years alone, central banks have accumulated more than 2,118 tonnes of gold, representing the most significant increase in decades. Central banks have been buying gold at record rates to escape the dollar’s devaluation. In addition, many of the BRICS nations are motivated to escape the weaponization of the USD.
Why You Should Expect This Gold Rally to Continue
Over the past few weeks, gold has confidently reached high after high. This consistent testing and surpassing of previous highs is exceptionally bullish. Gold price forecasts for 2024 are already looking strong, with a series of expert predictions averaging around $2,500 an ounce. There are plenty of reasons why gold prices are expected to move even higher.
Geopolitical Events
The uncertainty caused by geopolitical chaos is expected to be a significant boon for gold prices. The Russian invasion of Ukraine has remained at a deadly standstill despite being overshadowed by the Israel-Hamas conflict, which threatens to spill over the borders into a broader conflict. Plus, Taiwan recently confirmed the presence of US troops on its islands as tensions between the island nation and China rose.
US Election
The 2024 presidential election is on pace to be one of the most contentious in US history. Political chaos inevitably creates economic uncertainty, which leads people to seek out safe-haven assets. It’s reasonable to assume that more investors will increase their holdings in anticipation of economic volatility, no matter who comes out on top.
Institutional Buying
There’s been a shocking lack of excitement from retail investors despite gold bursting through all-time highs. However, that underwhelming sentiment isn’t going to last forever. An asset can only show continuous signs of strength before the whales dive in. The next phase of gold growth might just come from a massive influx of institutional buyers.
Silver Breakout Ahead?
Gold’s shining performance is stealing the spotlight from silver, which hasn’t seen the same jumps as its more popular counterpart. However, silver prices are always a few steps behind gold’s performance. In reality, these circumstances are creating a fantastic opportunity to buy silver bars and coins before prices shoot to the upside.
“That's when you want to buy silver - when it's not moving…when people are looking the other way.”
Tim Murphy
Precious Metals Advisor
Don’t Wait to Buy Gold (and Silver), Buy Gold (and Silver) and Wait
Despite achieving a series of all-time highs, now is a prime time to buy physical gold and silver. A confluence of economic instability, geopolitical tensions, a devaluing dollar, and political uncertainty are forcing central banks and investors into precious metals. Take advantage of these relatively low prices now before more demand sends prices skyward.
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