A Sharp Increase In Gold Prices Into 2024-2025
From BNN Bloomberg
Jeff Christian discusses the recent surge in gold prices and his outlook for the future. He begins by analyzing an unusual trading pattern in gold futures on the COMEX, where a significant volume of gold was traded in a short period. This surge drove the price of gold from around $2060 to a high of $2152, before settling back to around $2050. He notes that this wasn’t a single trade but thousands of trades over a half-hour period. Similar patterns were observed in silver, petroleum, and platinum, as well as a sharp fall in S&P 500 futures.
The Reasons Why
The reasons behind these trades, such as reactions to Jerome Powell’s recent comments or geopolitical events like missiles in the Red Sea.
Jeff emphasizes the importance of the upcoming open interest data, which could provide insight into whether these were short coverings or fresh positions in commodities and equities.
Regarding the future of gold prices, CPM Group predicts a sharp increase in the final quarter of the current year and into 2024-2025. This is based on the political and economic trends unfolding over the next 12 to 24 months.
Jeff points out that gold prices have set record levels in recent years, and this trend is expected to continue, leading to a more substantial upward move in 2024-2025.
Finally, Christian addresses the issue of global debt, particularly focusing on the U.S. He argues that the situation is not as dire as some suggest, comparing it to the post-WWII period in the late 1940s. He notes that while global debt is three times the global GDP, U.S. Treasury debt is only about 120% of the U.S. GDP, making it one of the least risky assets. He anticipates that in the face of global debt issues, investors are likely to pivot towards more secure assets like U.S. Treasuries and gold.
