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$3000 Gold in 2024?

Publius425 mins

Gold $3000?

In this post, I want to discuss why there’s a good chance that we will see $3,000 gold in the next 6-12 months.

Now the first reason and probably most important is central banks buying up gold in massive quantities. In the first quarter of 2024 central banks bought 290 tonnes of Gold, which was the most of any year on record.

Still, this isn’t just a blip on the radar. Central banks have been buying gold in record amounts the last few years. In 2023, central banks purchased 1,037 tons of gold, which was the second-largest annual purchase in history, just behind 2022’s record of 1,082 tons.

It’s important to point out it’s not just Russia and China buying as well.

The Czech Central Bank has announced that it will double its gold reserves the next 5 years. They are increasing them from 40 tons to 100. 

I realize they are not the biggest country, but smaller countries are following Russia and China’s lead.

While they might not say it publicly, central banks are buying gold for a few reasons. One is concerns around the national debt in the US and global debt too. The second reason is geopolitical tension. Not only have we seen escalations rise around the world, but it appears we’re no closer to resolving them. In addition, global conflict can affect things like trade routes. 

One other reason is countries are looking to diversify away some of their foreign exchange reserves from the US dollar. The De-dollarization trend is happening around the world right now and there’s no denying it. While the US dollar still dominates trade, I expect that percentage to shrink more and more the next few years. It will probably start small, and then drastically increase. It appears many countries want to stabilize their currencies and are choosing to buy gold. 

One reason gold probably will hit $3000, which is tied to some of the reasons before is inflation. Central banks around the world are seeing the value of the US dollar decline. Even more so, treasuries are becoming less and less appealing. This has a compounding effect as once treasuries begin to offer higher yields, this will accumulate even more onto the national debt. 

Interests rate cuts

The market and big banks aren’t stupid. They know what’s happening and many are buying up gold to hedge their risk. Institutional investors are buying up more gold as they see the writing on the wall. 

While we probably will see 3,000 gold this year, I expect the value to go much higher in the next five to ten years. Even without an economic crisis, we’ll see high inflation and gold and silver will naturally rise as everything will go up. Of course, this just means the dollar is getting weaker and weaker not that gold is any more valuable. 

Thanks.

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