Gold and Silver Surpass Key Resistance, Analyst Predicts Major Gold Price Hike
Breakthrough in Gold and Silver Prices
Precious metals analyst Cyrille Jubert reported that gold and silver have broken through crucial monthly resistance levels, with the Shanghai gold premium reaching 1.9%. This development indicates a strong upward trend in precious metals.
Gold Price Projection
Jubert predicts that the price of gold could reach $3,170 by 2025. This forecast is based on the ongoing accumulation of gold by central banks (excluding the Federal Reserve) since 2009, in anticipation of its future role in the monetary system. The analyst also emphasized an expected decline in the fiat (US) dollar's purchasing power.
Recent Market Dynamics
Gold prices recently surged to $2,071, matching an all-time high reached three times in the past three years. This spike occurred after traders who were "short" at the resistance level bought back their positions. The Shanghai market also experienced a significant increase in gold prices due to a "short squeeze," with prices momentarily reaching $2,148.
Central Banks’ Gold Accumulation
Central banks have been accumulating gold and reducing their dollar and U.S. Treasury bill holdings. This shift is attributed to changing dynamics in oil purchases and a diminishing market value of U.S. Treasuries, compounded by increasing U.S. government debt.
Bright Future for Gold
The Economist indicates a promising future for gold, contrasting with a projected loss in fiat currency value by 2024. If past trends following the breach of monthly resistance levels continue, gold prices could see a significant rise, mirroring the increase from $1,354 to $2,072 observed between 2014 and 2019.
Silver's Upward Trajectory
Silver also capitalized on these market conditions, surpassing a long-standing sloping resistance level from the 2011 highs. Industrial demand for silver, especially for photovoltaics (PV), is expected to surge in 2023, while official silver inventories are decreasing.
Silver Market Manipulation Concerns
Jubert pointed out that official shares of the iShares Silver Trust (SLV) are often used to manipulate silver prices in New York and London. He anticipates 2024 to be a rewarding year for those investing in precious metals as a hedge against potential banking crises and currency devaluation.
Strategic Implications for Investors
This analysis suggests a strategic shift for investors towards precious metals, considering the projected increase in gold and silver prices and the potential decline in fiat currency value. The emphasis on gold accumulation by central banks and the surging industrial demand for silver underscore the growing importance of precious metals in the global financial landscape.
