Gold prices are skyrocketing to historic heights, with the precious metal hitting all-time highs every day. Now, financial analysts are responding to the new gold bull market. So far this year, gold, up more than 52 percent as of this writing, has forced them to adjust their price expectations. October 8, 2023 Gold settles gold price exceeded $4,000 / oz for the first time. Immediately after, it jumped up to more than $4,100.
The sudden spike in gold prices has led to some interesting elbow-rubbing between industry and non-industry financial analysts. Now they’re racing to recalculate their estimates in the wake of the massive cuts realized so far. Rising gold prices have caused speculation about its future direction, as the prices have shot up an incredible 95 percent since the beginning of January 2024.
And this from Randy Smallwood, CEO of the Western Canada based mining company Silver Wheaton, on the prospects for gold over $5,000. In fact, he thinks the metal might top $5,000 in the next twelve months. It’s a “reasonable, more than reasonable” forecast in the current geopolitical environment, Smallwood says. He substantiates this opinion by comparing it to what the market looks like today.
In their original notes, they heavily stressed that the White House’s unusual policy framework should really set gold prices soaring. The most important are fiscal deficits, increasing debt levels, and the need to reduce interest rates because of inflation concerns.
“The White House’s unorthodox policy framework should remain supportive for gold given fiscal deficits, rising debt, intentions to reduce the current account deficit/capital inflows, along with a push to cut rates with inflation around percent.” – Bank of America analysts
The Bank of America analysts further noted that if investment demand increases by 14 percent—similar to the demand seen this year—gold could reach $5,000 per ounce by 2026. Given the good news I’ve heard from industry experts about the current price boom, this forecast isn’t all that surprising.
Smallwood told the crowd he was excited about gold prices. He thinks that the way things are going might otherwise push them to $10,000 an ounce before the decade is out. His confidence speaks to a deeper, industry-wide sense that gold is poised for something big amid a perfect storm of economic uncertainty.
“I’m confident that we will see gold over $5,000 within the next year. It’s a trajectory that could easily put it up to $10,000 an ounce before the end of the decade. It wouldn’t surprise me at all.” – Randy Smallwood
With gold’s meteoric rise in price, investors and analysts are both watching gold market developments closely. Yet geopolitical tensions and inflationary pressures are on the rise. At the same time, shifts in US monetary policy have combined to form a perfect storm conducive to gold’s appreciation. This paradigm begs the question of just how high gold prices can go in the months and years to come.