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Here’s Another $5,000 Gold Price Prediction

Now that gold prices have set a new high, we have seen more price predictions above $3,000 per ounce. This week, I noticed that the same person who once bet my friend Gary Alexander that gold would fall below $1,000 in 2017 – and later predicted gold would go above $3,000 – has now predicted $5,000 gold.

 

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1st American Reserve reiterates Major Wall Street Firms' New Forecasts of $3,000 to $5,000 Gold by 2022-2023

Gold rose $23 Monday morning, September 14, from $1,940 to $1,963, before settling into the high $1950s, mostly based on a weaker dollar, which was in turn based on hopes of continued “quantitative easing” by the Federal Reserve when they meet this Tuesday and Wednesday.  Gold futures also rose $13 last week. In Gold will hit new leveladdition, gold-backed ETFs rose for the ninth straight month in August, as 39 tons of bullion worth, $2.1 billion at market prices, were added to gold ETFs in August, with seven tons bought in Asia.

Major mainstream investment advisory services are now predicting gold prices more than doubling in the next 2-3 years. First of all, Bloomberg Intelligence “is not ruling out $4,000 gold by 2023,” noting that the gold bull market is “just beginning.” Despite silver’s recent surge – growing twice as fast as gold since spring – Bloomberg Intelligence senior commodity strategist Mike McGlone LAO predicts that gold will outperform silver in the second half of the year, due primarily to a weak economy and weaker dollar.

“Gold has the catalysts to maintain performance leadership into year-end, in our view,” McGlone wrote. “Central-bank rate easing and U.S. bond yields gravitating toward zero are solid underpinnings for gold, as is the potential for increased U.S. stock-market volatility approaching the presidential election.”

 

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Comparison Performances of Precious Metals vs. Stocks During the First Eight Months of 2020

Gold had a good week, rallying after every correction. On Monday, August 31, gold rallied as the dollar weakened to its lowest level in two years as U.S. coronavirus cases topped six million. (Investors have often bought gold as a hedge against economic uncertainty, such as times when the coronavirus pandemic has worsened, or when the economy has flattened after beginning to rise.) For the month of August, gold reached its peak on August 6 and then remained above $1,900 in late August, while silver kept rising.

 

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USA Today Quotes Mike Fuljenz (and Our Customers) in a Positive Gold Article

Today’s September 1, USA Today published in their Money Section an extensive and positive article on gold (“Gold Gleams in Hard Times”). Even though they only quoted me once (officially), they paraphrased a lot of material I gave them, and what I told them about the qualities of gold. They also quoted some interviews from our satisfied customers, which we helped set up for them. You will probably recognize many of these statements because you heard them here first in the weekly Metals Report – months ago.

 

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Gold is Rare, Paper is Cheap: That Should Spell Higher Gold Prices

The dollar is down 10% in the last five months in part because the Federal Reserve added $3 trillion to its balance sheet and the U.S. Congress passed $3 trillion in relief packages through May with more to come.

The 2020 federal deficit is $2.8 trillion through July 31. All this compares with a paltry 108 million ounces of new gold mined each year. Even at $2,000 per ounce, that’s only $216 billion, less than 10% of the budget deficit and less than 1% of annual GDP.  Gold is very hard to find, and it is increasingly found only in politically dangerous jurisdictions or in difficult geographical locations for mining equipment.

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Gold Had a Roller Coaster Week

Gold had a roller-coaster week, topping $2,000 an ounce again last Tuesday, August 18, as the U.S. Dollar dropped to its lowest point in two years, falling over 10% in a 5-month period since March 18.  Then, gold drifted lower as the dollar rallied. On Friday morning, August 21, gold fell from $1,950 down to $1,910 before rallying back above $1,940 as U.S. initial jobless claims climbed back above 1 million again.

Warren Buffett Switches from Banks to Gold

One of the most successful investors of the last 50+ years has always had an eye for value. The big headlines on Friday showed that the “Sage of Omaha” was unloading his long-time holdings in U.S.

Photo by Mark Hirschey
Photo by Mark Hirschey

bank stocks and buying gold stocks. At the mid-point of each quarter (August 15 in this case), hedge fund managers are required to release their holdings to the SEC. We have usually reported any unusual moves in the gold market by these hedge fund managers. This time around, there have been more “first time” gold buyers than usual. For instance, Mason Capital Partners, Sandell Asset Management and Caxton Associates all initiated new positions in the SPDR Gold Trust, which has followed the price of gold by rising about 30% year to date. But there’s no question that the most outstanding rookie buyer in the gold market is Warren Buffett.

 

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Now is Not the Time to Sell - 1st American Reserve advises

In times past, gold “spiked” to a peak and then fell back, so that the peak would have been a good time to sell bullion.  That is probably not the case this time. Gold has not spiked to a sharp peak, this time around, as it did in 1979-80. This rise has taken five years and this last rise has been gradual. The 2011 rise from $1,500 to $1,900 was fairly sharp, but gold prices stayed above $1,500 for another 18 months in that case.

 

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The Adens Declare “Gold is the Best Investment in the World Today”

In their popular financial newsletter, Pamela and Mary Anne Aden declared on July 17 that gold is “the best investment in the world today” and told their readers “we want you on board the gold train as it pulls out of the station.”  The Adens outlined some of the reasons why: “Gold is, and always has been, the world’s safe haven. That is, during times of uncertainty, insecurity, economic or political upset, war, devaluations and more, gold has always come out as #1. And this track record goes back more than 5,000 years… 

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The Best Storage Option for Your Precious Metals

Last Tuesday, July 28, 2020 Danielle Braff of The New York Times wrote an article about gold storage, a subject that has interested us for a long time. She interviewed a lot of interested parties, with some fascinating facts, but I’m afraid there was some disinformation presented in the article.  She quoted several operators of private bullion vaults, who had a vested interest in recommending against the use of bank safety deposit vaults.

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Goldman Sachs Raises Their 12-Month Forecast to $2,300 Gold and $30 Silver

Goldman Sachs Raises Their 12-Month Forecast to $2,300 Gold and $30 Silver
Goldman Sachs recently upgraded their 12-month forecast for gold by 15%, from $2,000 to $2,300, and they pushed their silver forecast up 36%, from an already-outdated $22 to $30 per ounce. Continue reading "Goldman Sachs Raises Their 12-Month Forecast to $2,300 Gold and $30 Silver"

One Reason Gold is Soaring: The Fed is Recklessly Fueling Future Inflation

Gold has shot up to a record high. Silver has also gone parabolic in price, rising to $24.85 (a 7-year high), doubling since March 18 (at $12.42) and thereby falling under an 80-to-1 gold/silver ratio, which we had predicted a few months ago. Part of the rise of both metals is due to a falling U.S. dollar. The Dollar Index is down 4% in July alone and down nearly 9% in the last four months, due in large part to the massive printing of fiat paper money.

The Federal Reserve and the U.S. Treasury – with the aid of the spendthrift U.S. Congress – are throwing unprecedented amounts of fiat money (unbacked paper currency) at the coronavirus problem, in a series of four (going on five) multi-trillion dollar stimulus packages to keep the American economy afloat. The Federal Reserve is fighting recession and deflation by fueling the economy with excess liquidity and is thereby sowing the seeds of future inflation – which came about prematurely, as the Labor Department recently said the Consumer Price Index soared 0.6% in June (a 7.2% annual rate).

 

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Gold is Always Gold, but Stock Indexes Frequently Change Names

At times like this, beware of articles that say gold has not done very well, using 1980 as a starting point. As soon as gold retreats below its new high, you will see articles in many major publications saying that gold has not even reached a new “real” after-inflation high. They will say the $850 peak in 1980 is really around $2,500 to $3,000 in today’s dollars but taking any investment’s peak as a starting point is unfair.

 

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1st American Reserve notes that Many Popular Rare Gold Coins Outpace Gold Bullion Gains

Many Popular Rare Gold Coins Outpace Gold Bullion Gains

As of Monday morning, gold was up from $1,515 to about $1,815. In the last six months, gold has moved up $300, while the premiums on some MS-63 $20 Liberties have moved up $600. The premiums on some gold MS-63 $10 Indians have moved up proportionally in that same time span, also outperforming gold Rare Gold coin rise in valuebullion.  Reasons for the rise in premiums are that we had recent large quantity melting of vintage U.S. $10 and $20 denomination gold coins and have seen periodic shortages of classic gold coins that are becoming scarcer. 

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The Adens Declare “Gold is the Best Investment in the World Today”

In their popular financial July 17 newsletter, Pamela and Mary Anne Aden declared gold as “the best investment in the world today” and told their readers “we want you on board the gold train as it pulls out of the station.”  The Adens outlined some of the reasons why: “Gold is, and always has been, the world’s safe haven. That is, during times of uncertainty, insecurity, economic or political upset, war, devaluations and more, gold has always come out as #1. And this track record goes back more than 5,000 years… Throughout history, gold has always maintained its purchasing power, and again, no other investment comes close…. Pamela and Mary Anne AdenPlus, gold is durable and it’s beautiful, which has also made it superior to other mediums of exchange.”  They then go back through history, from the Egyptian pharaohs, who were buried with their gold, through the Roman empire, to the Spanish conquistadors, to the 1849 Gold Rush, the Vietnam boat people; to the present, when we’ve seen gold beat every other investment since 1970, since 2000, and this year, too.

 

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