Gold On The Brink of a Historic Breakout: Analysts Weigh In

In a series of insights and predictions from notable financial analysts, gold has been highlighted as a key player in the upcoming economic shifts. The precious metal is not only hitting record highs but is also positioned for potential future gains amid global economic changes.

Peter Schiff’s Bold Prediction on Gold and the U.S. Dollar

On November 28, 2023, renowned financial commentator Peter Schiff predicted a historic breakout for gold, paired with a stark crash of the U.S. dollar. Schiff foresaw this as a pivotal moment for the Federal Reserve and the economy, expecting soaring inflation, interest rates, and unemployment. Dismissing the possibility of a soft landing, Schiff anticipated a crash-and-burn scenario.

He predicted that once gold surpasses the $2,100 mark, it would face no significant resistance, leading to rapid increases in value. Schiff’s analysis indicated the dollar’s decline and gold’s ascent as the world seeks refuge from inflation.

Mike McGlone’s Analysis

The following day, Mike McGlone, a Senior Commodity Strategist at Bloomberg Intelligence, shared his outlook on gold, potentially heading toward $3,000, with copper dropping to $3 in 2024. He highlighted a trend favoring gold over copper, indicative of a global recessionary path, possibly concluding after a period of central bank easing.

Schiff’s Follow-Up on Gold’s Performance

On November 30, Schiff noted that although gold hadn’t reached a new record high, it achieved its highest monthly close ever, ending a month above $2,000 per ounce for the first time in history. He saw this as a significant milestone, signaling the likelihood of much higher prices soon.

CNBC’s Report on Gold’s All-Time High

On December 1, CNBC reported gold prices rallying to an all-time high, driven by Federal Reserve Chair Jerome Powell’s remarks, which boosted traders’ confidence about the end of the Fed’s monetary tightening. Spot gold surged to $2,069.10 per ounce, with U.S. gold futures also hitting a record peak at $2,089.7.

Despite these nominal records, CNBC noted that, on an inflation-adjusted basis, gold’s true all-time high was in 1980, equivalent to $3,452.40 today.

Tai Wong, an independent metals trader, and Suki Cooper, an analyst at Standard Chartered, provided insights into the market’s reaction to Powell’s comments and the potential overbought status of gold prices. Lower interest rates, Treasury yield dips, and a weaker dollar were cited as factors boosting gold’s appeal, with expectations of the rally continuing through year-end, as per Everett Millman, chief market analyst at Gainesville Coins.

Schiff Comments on Discrepancy Between Gold Prices and Mining Stocks

On December 1, Schiff provided additional insights, noting an intriguing anomaly in the market. Despite the significant rise in gold prices, with a $35 increase and a record-high close, gold mining stocks saw a comparatively smaller percentage increase. Schiff interpreted this as a sign of extreme bearishness in the market. He pointed out that gold continues to ascend what he termed a “classic wall of worry,” highlighting that gold stocks would still need to rise by 12% to reach a 52-week high.