• Gold has been posting record breaking returns in 2024, outperforming the S&P 500
• Analysts think that whether Trump or Harris wins, the price of gold will go up
• Now is opportune time to secure your funds with physical gold before the election

Gold’s Rise to Continue

As the 2024 U.S. presidential election looms, financial markets are bracing for shifts in fiscal and economic policy. But one asset is expected to benefit no matter who wins—gold. The precious metal has already demonstrated remarkable performance this year. It has risen about 21% year-to-date and reaching an all-time high of $2,531.70 in August. Gold has outperformed the S&P 500 index, which is up around 15%. With a combination of economic factors and political uncertainty on the horizon, gold is well-positioned to continue its upward trend.¹

.

²

Bullish Factors Supporting Gold’s Rise

Several key factors are already fueling gold’s bullish trajectory. First, the anticipated cuts in interest rates are making gold a more attractive investment. Lower rates reduce the appeal of yield-bearing assets like bonds. This drives more investors toward safe-haven assets like gold. Commerzbank Research predicts as many as six rate cuts between now and mid-2025, further boosting gold’s potential.³

Another major driver is the strong demand from central banks. In 2023, global central banks purchased over 1,000 tons of gold as they sought to diversify away from the U.S. dollar. The People’s Bank of China has led the charge, engaging in an 18-month buying spree. According to the World Gold Council, 2024 began with 290 tons of net gold purchases in the first quarter alone. That is one of the strongest quarters on record.⁴

Geopolitical risks are also playing a role. The ongoing war between Russia and Ukraine, along with the Middle East conflict, is fueling instability. They are adding to the unpredictability in global markets.

A looming recession and potential market crash are fueling gold demand as well. “Black Swan” investor Mark Spitznagel sees a recession hitting. It will occur after the biggest making bubble “we’ve ever seen” bursts. ⁵

How Each Candidate Could Push Gold Prices Higher

The election itself is adding to economic uncertainty, and, in turn, the demand for safe haven gold. There is intense unease over the unknown direction of future fiscal policy.

Whoever wins is expected to bring policies that can push gold prices higher. Harris and Trump both hold the potential to blow up deficits and reignite inflation.

A Harris win in likely to mean a shift to more progressive policies. They could include higher business taxes and increased regulation. She is also expected to continue, or increase, the high-spending approach of the Biden administration. The U.S. government has already surpassed borrowing $2 trillion annually, and that figure is expected to reach $2.8 trillion by 2034. A Harris administration has little chance of reducing the deficit. As a result, the dollar would weaken, and growth would stagnate. Both of which historically lead to higher gold prices.⁶

If Donald Trump returns to office, his policies could also fuel a bullish gold market. Trump is expected to push for tax cuts, but without credible plans to reduce spending, these cuts could exacerbate the deficit. Additionally, Trump has a history of engaging in trade wars. They could reignite geopolitical tensions and uncertainties in the global market. His tariff threats may speed up the pace of de-dollarization. Countries would seek to protect their economies from a weaponized dollar. Furthermore, if Trump pressures the Federal Reserve to maintain low interest rates, the dollar could weaken. And as weak dollar tends to result in higher gold prices.

Conclusion

Both candidates are expected to have policies that could inflate deficits and create economic or geopolitical uncertainty. Gold stands out as a reliable hedge against this instability. As Naira Metrics notes, investors looking to protect their funds would do well to avoid risky assets. And gold offers a safe alternative.⁷

Ole Hansen is the Head of Commodity Strategy at Saxo Bank. He sums up gold’s future outlook. “Investors are likely to continue viewing gold as a hedge against the uncertainties posed by both economic and policy forces.” Over the past decade, gold has provided an average annual return of 8.4% in U.S. dollars, consistently outpacing inflation. TD Securities predicts gold can hit $2,700 per ounce in the next few quarters. American Precious Metals Exchange forecasts gold could break $3,000 in 2025. ⁸

As we move closer to the 2024 election, the case for gold only strengthens. Whether Kamala Harris or Donald Trump wins, both candidates will bring policies that could further drive demand for gold. To learn more about how physical precious metals can protect your retirement, especially when held in a Gold IRA, contact us today at 800-461-0071.

 

Notes

1. https://fortune.com/2024/08/17/gold-price-outlook-wall-street-forecasts-3000-fed-rate-cuts-central-banks-recession/
2. https://www.telegraph.co.uk/business/2024/08/28/gold-soaring-on-fears-economic-catastrophe-kamala-harris/?ICID=continue_without_subscribing_reg_first
3. https://fortune.com/2024/08/17/gold-price-outlook-wall-street-forecasts-3000-fed-rate-cuts-central-banks-recession/
4. https://fortune.com/2024/08/17/gold-price-outlook-wall-street-forecasts-3000-fed-rate-cuts-central-banks-recession/
5. https://fortune.com/2024/08/17/gold-price-outlook-wall-street-forecasts-3000-fed-rate-cuts-central-banks-recession/
6. https://www.telegraph.co.uk/business/2024/08/28/gold-soaring-on-fears-economic-catastrophe-kamala-harris/
7. https://nairametrics.com/2024/09/06/gold-stocks-and-dollar-octas-guide-to-navigating-market-volatility-during-election-time/
8. https://www.kitco.com/news/article/2024-09-10/trump-vs-harris-gold-wins-either-way-saxo-banks-hansen

• With almost $1 trillion in debt due this year, commercial real estate is being called a ‘ticking time bomb’
• The primary holders of CRE debt, more than 200 regional banks are in danger of collapse
• Physical precious metals, especially those held in a Gold IRA, can protect the value of your savings from the impact of a commercial real estate meltdown

Commercial Real Estate Risk Skyrockets

Commercial real estate, once seen as the bedrock of the American economy, is now being called a “ticking time bomb” as almost $1 trillion in loans come due this year. The collapse of the CRE sector would send shockwaves through the economy that could devastate savings.

The market is still reeling from record low vacancy rates and devalued buildings. Lower valuations make it harder for landlords to borrow money. Banks and property owners are now accepting that their buildings may never recover their pre-pandemic value. Fitch Ratings said office values have dropped 35% from their peak. Capital Economics predicted prices could drop another 20%. ¹

Faced with this reality, office buildings are being sold off at staggering losses. One midtown Manhattan office building sold at a 97.5% discount in July.²

According to the Mortgage Bankers Association, about $930 billion in commercial real estate loans will come due this year. Commercial mortgages are typically set up with a balloon payment. This way, property owners only must pay the interest before the major payment comes due at the end of the loan. Typically, when rates were low, owners would just refinance and push the balloon payment down the road. But with interest rates being held higher for longer, that option is no longer feasible. Commercial real estate lending declined 47% last year. ³

At the same time, operating expenses have gone up dramatically. Owners are choosing to simply not pay back their loans instead of saving their properties with their own cash. About $95 billion of the US properties are in distress or at risk of becoming so. The office sector accounted for two-thirds of newly delinquent loans. In July, $1.9 billion in office loans became newly delinquent. ⁴

⁵

Scott Rechler is the CEO of New York landlord RXR. He called the crisis a slow moving storm and said, “So at some point or another, the day of reckoning needs to come,” he added. “I think it’s here.”⁶

Rate Cuts Too Little, Too Late

The signal for lower interest rates may be too little, too late for the drowning commercial real estate sector. Fed Chair Powel says commercial real estate risk “will be with us for some time, probably for years.”

“Excessive exposure to commercial real estate remains a ticking time bomb within the banking system,” said Rep. Ritchie Torres (D-N.Y.). “An interest rate cut might ease the symptoms, but it will not cure the disease itself. ‘Extend and pretend’ can delay a crisis but it cannot make it magically disappear.”⁷

There is bipartisan support to make it easier to convert office buildings into housing. Solve two problems at once. However, the process is slow and expensive and not all commercial spaces can be converted.

Bond & Bank Worries

A secondary crisis is looming in the bond market. Many of the floating-rate loans were bundled into the $80 billion commercial real estate bonds and sold to investors. This may raise a systemic risk for banks issuing the bonds.

John Devaney is the CEO of the United Capital Markets hedge fund. He has the dubious distinction of being one of Time Magazine’s 25 people to blame for the 2008 mortgage crisis. He stated commercial real estate is a “slow moving train wreck” and the commercial bond market is in shambles. “The CMBS market is actually a disaster right now. Many things are unfolding right now and the bond pricing is telling us things are very, very bad,” the United Capital CEO said. He warned the collapse could ruin large downtown area that depend on tax revenue from office spaces. ⁸

The demise of the sector spells trouble for small and medium-sized commercial banks. They are being classified as “stressed.” Small banks have CRE loans values exceeding 158% of their risk-based capital. Midsize banks are at 228%. ⁹

A recent report stated that 282 of 4,000 US banks are on the verge of collapse. This is due to the double hit of maturing CRE loans and losses resulting from high interest rates. The same things that caused the catastrophic failures of Silicon Valley Bank, Signature Bank and First Republic Bank. Higher for longer interest rates have exposed the vulnerability of banks worldwide according to the International Monetary Fund.

Banking System Risks

If multiple banks try to raise capital at the same time, it could destabilize the banking system, similar to what happened in March 2023. Market volatility might lead investors to demand higher yields, driving up borrowing costs. A new recession could worsen the situation, causing widespread asset devaluation. Significant losses in commercial real estate loans could leave hundreds of small and midsize banks undercapitalized, with larger banks also at risk.

Conclusion

The growing risk factors facing commercial real estate are raising questions about how much longer the sector can go on. Insiders agree that a reckoning is on the horizon, the results of which could be catastrophic and ripple throughout the entire economy. The time to prepare is before the crisis becomes a reality. Physical precious metals, especially those held in a Gold IRA, can protect the value of your savings from the impact of a commercial real estate meltdown. Contact us today at 800-462-0071 to learn more about how to secure your funds.

Notes:

1. https://markets.businessinsider.com/news/bonds/real-estate-crash-commercial-property-prices-investing-mortgage-backed-securities-2024-8
2. https://www.politico.com/news/2024/09/02/office-property-values-fed-00174697
3. https://www.politico.com/news/2024/09/02/office-property-values-fed-00174697
4. https://www.politico.com/news/2024/09/02/office-property-values-fed-00174697
5. https://www.linkedin.com/posts/james-w-stuff_delinquency-office-loans-activity-7228905623340376064-eF_g/
6. https://www.politico.com/news/2024/09/02/office-property-values-fed-00174697
7. https://www.politico.com/news/2024/09/02/office-property-values-fed-00174697
8. https://markets.businessinsider.com/news/bonds/real-estate-crash-commercial-property-prices-investing-mortgage-backed-securities-2024-8
9. https://www.noradarealestate.com/blog/commercial-real-estate-crash-could-trigger-economic-tsunami/

• At over $35 trillion and growing, the national debt presents a clear and present danger to the United States
• An economic research report stated that the US is approaching a point where no amount of taxes or spending cuts can prevent a crisis
• Safe haven assets, like physical gold and silver, held in a Gold IRA can shield the value of your portfolio from the effects of massive national debt

National Debt, and Danger, Grow Unchecked

As the Presidential election heats up, there is one issue both parties would like to avoid – the national debt. Having reached astronomical heights, and growing, the debt presents a very real danger to the US economy. With a political system that may be structurally unable to prevent a crisis, Americans should prepare now before consequences hit.

By the Numbers

The US national debt currently sits at $35.26 trillion. That is around $104,000 per citizen. Meanwhile, US Federal tax revenue is at $5 trillion. This model obviously cannot be sustained for much longer. We’re growing the debt more than twice as fast as we’re growing the economy. To grasp the enormity of the debt, there is about $450 trillion combined in the world. Our debt accounts for 7% of all the money in existence. ¹

The interest on the debt is already more than military spending. Over the next decade, interest is expected to double to $1.7 trillion. That is roughly the equivalent of adding another Medicare program. ²

³

Prior to 2000, annual deficits were turning into surpluses. The national debt shrank over three years to around $5.6 trillion in 2000. Alan Greenspan went as far to say the debt could be paid off if current policies continued. We had a debt-to-GDP ratio of 55 percent. ⁴

Today, at $35 trillion, the debt-to-GDP ratio is 122% – and rising. Aggressive government spending is raising the debt $1 trillion every 100 days. For context, the debt-to-GDP ratio during World War 2 was 106% of GDP. ⁵

Future of the Debt

The University of Pennsylvania found both Trump and Harris proposals would increase the national debt. Trump’s would raise the national debt by 9.3%. Harris’ would add 4.4%. The debt would expand more under Trump because he would make his 2017 tax cuts permanent. He would also cut taxes on corporate income and Social Security benefits. Harris would let the cuts expire and raise taxes on businesses and high-income individuals. At the same time, those taxes would be offset by more government spending. ⁶

No matter who wins, the US is headed for $50 trillion in debt by 2034.

Systemic Failure on the Debt

Impediments to preventing a debt crisis may be built into the system. A study by Arnold Ventures states that the US budget process itself has broken. There has always been political brinkmanship, fighting until the very last possible minute. But now, instead of finding workable solutions, Congress simply signs off on raising the debt limit without accountability from either party. The Democrats get more spending, and the Republicans get more tax cuts. Both sticking the American people with the bill.

Vanishing Debt Safeguards

Some economists say the unique role of the US in the world economy protects it from the consequences of runaway debt. They call it ‘exorbitant privilege’. A study found the US can sustain debt around 22% of GDP. That’s because the dollar is the dominant currency for international trade and reserve currency. Other countries will continue buying US debt to avoid sinking their economies. In addition, the US gets significant leeway from seigniorage revenues – printing dollars for next to nothing, and then selling them to other nations for market value. ⁷

The de-dollarization movement could totally undermine this debt protection. China’s yuan or a new gold-back BRICS+ currency could rival the dollar. If US debt reaches extremely high levels, rival currencies may look like the safer choice. The US debt will become a greater liability when we can no longer ‘force’ other nations to finance our debt. Interest rates would skyrocket and send the country into a debt-doom spiral.

Economists Smetters and Gokhale concluded that if US debt held by the public exceeds 200 percent of GDP, no amount of tax hikes or spending cuts can prevent default. We’ll either have to say we will not pay back all our debt, or else inflate it away. Both of which would have massive negative consequences for American workers and consumers. They estimate that the US will reach this point in about 20 years.⁸

Solutions

To fix the problem, entitlements will need to be slashed, taxes will need to be raised, as will the retirement age. Paying off the debt will be a painful legacy passed to future generations.

Some economists are trying to find hopeful solutions. World Bank Group President David Malpass explained tackling the deficit will raise stocks prices, increase employment, and lift wages. To get past a broken Congress, he says begin spending cuts with “small popular one, and then another small one, and then a big popular one, and then a tough one. Build credibility.”⁹

Conclusion

Come January 25th, the debt ceiling will need to be lifted again. Whoever is President on that day is unlikely to take measures that reduce the national debt. Instead, we’ll hurtle closer to “most predictable crisis” – one that can ruin the country’s, and every American’s, financial future. That’s why protecting your portfolio now with safe haven assets like physical gold and silver is a good idea. A Gold IRA can safeguard your savings from the consequences of runaway national debt. Call us today at 800-462-0071 to learn how.

Notes:
1. https://ktrh.iheart.com/featured/houston-texas-news/content/2024-08-27-the-national-debt-now-accounts-for-seven-percent-of-all-global-money/
2. https://www.barrons.com/articles/national-debt-federal-deficit-trump-harris-6c5c6740
3. https://www.forbes.com/sites/dougcriscitello/2024/08/27/will-the-us-government-be-there-when-you-need-it-most/
4. https://ktrh.iheart.com/featured/houston-texas-news/content/2024-08-27-the-national-debt-now-accounts-for-seven-percent-of-all-global-money/
5. https://www.barrons.com/articles/national-debt-federal-deficit-trump-harris-6c5c6740
6. https://www.newsmax.com/newsfront/donald-trump-kamala-harris-trillions/2024/08/28/id/1178179/
7. https://cepr.org/voxeu/columns/exorbitant-privilege-and-sustainability-us-public-debt
8. https://www.vox.com/policy/367278/us-national-debt-gdp-government-inflation-solutions-recession
9. https://www.barrons.com/articles/national-debt-federal-deficit-trump-harris-6c5c6740

• Gold broke another all-time high, hitting $2,571 an ounce
• Demand is likely to increase due to Fed rate cuts, a weaker dollar, and geopolitical uncertainty
• Buying gold now in a tax advantaged Gold IRA can lead to long-term gains

Gold Breaks New All-Time-High

Gold has been on an impressive run since the end of 2022, and it shows no signs of slowing down. On August 20th, gold reached yet another record high. Currently, gold is outperforming stocks, bonds, and even Bitcoin. Now entering its 25th year of a bull market, analysts believe that gold’s upward trend is far from over. The continuing surge is driven by a mix of global demand and economic factors.¹

For the first time ever, the value of a single gold bar has crossed the $1 million mark. Of course, that single gold bar is the 400 troy ounce London Good Delivery bar. The bar is the standard unit of trade in major international gold markets. The price of gold is up more than 20% this year, trading at a record high above $2,500 an ounce, with a peak of $2,571.²

.

³

Gold Demand Sources

The demand for gold is global, but the reasons for this surge vary. In India, there’s a significant increase in demand due to traditional holiday buying and a recent cut in import duties. The chief executive of the London Bullion Market Association said, “It’s really a question of how quickly they can get metal into the country, in terms of the number of flights.”⁴

De-dollarization

Meanwhile, demand also increased on an accelerating de-dollarization movement. The BRICS+ nations are increasing their gold reserves as they reduce their dollar holdings. They are also developing a gold-backed currency to challenge dollar supremacy. Central banks, especially the People’s Bank of China, continue to make record gold purchases. Soaring prices over the past two years have largely been fueled by China.

Geopolitics and Interest Rates

Americans are also contributing to demand. Dangerous geopolitical conflicts and the upcoming presidential election are increasing the desire for financial stability. Gold is considered a safe-haven asset, retaining its value during times of uncertainty. John Reade, chief market strategist at the World Gold Council, commented. He said, “What we have seen is investors and speculators in the West starting to return to the gold market. This has been fast money that has been driving gold.”⁵

Interest rates are also playing a crucial role in the gold market. Western investors largely sat on the sidelines during gold’s 20-month rally. They are now returning with the prospect of interest rate cuts. Institutional investors and bullish hedge funds are boosting gold prices. As are opaque purchases by family offices who are concerned about a devalued dollar.

Investors are betting that further interest rate cuts by the Federal Reserve will push gold prices even higher. Gold tends to rise when interest rates go down. Lower rates reduce the opportunity cost of holding non-yielding assets like gold. This makes it more attractive to investors. In addition, gold is internationally denominated in dollars. So, when the dollar goes down, gold costs more.

National Debt

However, safe haven demand isn’t just being driven by geopolitics and monetary policy. The U.S. national debt is now at $35 trillion and growing. It is eroding confidence in the dollar’s value and the creditworthiness of the United States. Investors are looking for security beyond once bedrock-solid T-bills.

Future Forecasts

Looking ahead, the gold rally appears far from over. Commerzbank expects gold prices to consolidate within the $2,500 range over the next few months. But they don’t expect them to stay static. “We expect the gold price to continue rising in the first half of 2025 due to further Fed interest rate cuts, a U.S. inflation rate that remains above target, and a weaker U.S. dollar,” said the bank’s precious metals analysts. The head of commodities at Citi Research believes that gold could reach $3,000 an ounce by mid-2025.⁶

Conclusion

The bottom line is that gold’s trend remains bullish as we move into September 2024. Even though aggressive bull markets rarely move in straight lines, the quarter-of-a-century trend in gold suggests that any dip could be a chance to add more gold to a diversified portfolio. Since 1999, buying every dip in gold has proven to be a strategy that yields positive returns. Those returns are amplified in a tax-advantaged Gold IRA. To learn more about how you can benefit from gold’s ascent, contact us today at 800-462-0071.

Notes
1. https://seekingalpha.com/article/4715944-gld-gold-shows-no-sign-of-slowing-its-ascent
2. https://www.benzinga.com/analyst-ratings/analyst-color/24/08/40457722/gold-is-getting-its-moment-in-the-sun-and-experts-say-the-record-high-prices-could-
3. https://www.reuters.com/markets/commodities/gold-steady-near-record-high-investors-seek-more-fed-cues-2024-08-20/
4. https://www.ft.com/content/03ed761e-ccf9-4494-b1f8-1cab8313a07f
5. https://www.ft.com/content/03ed761e-ccf9-4494-b1f8-1cab8313a07f
6. https://www.kitco.com/news/article/2024-08-20/commerzbank-sees-gold-prices-consolidating-around-2500-year-end

• Gold prices have been reaching all-time-highs primarily due to purchases from BRICS+ central banks.
• In October, the BRICS+ de-dollarization agenda expands as they plan to announce information regarding the launch of their own gold-backed currency.
• Owning physical precious metals in a Gold IRA can not only protect the value of your savings over the long term, but it could also potentially grow them.

BRICS+ and the Rise of Gold

Gold’s surge to a record high of $2,480 on July 17th underscores its enduring status as a safe haven amid escalating global tensions and economic uncertainty. But the primary driver of demand isn’t coming from the investment sector. Instead, this rise is largely driven by the BRICS+ alliance. Central banks from BRICS+ nations have been on an unprecedented gold buying spree in their pursuit of de-dollarization. This October, they may be announcing the launch of a new currency to rival the dollar – setting off a global shift that could have a significant impact on the US economy and your savings.

Who Are the BRICS+?

The BRICS+ alliance was originally an economic consortium of five major emerging economies—Brazil, Russia, India, China, and South Africa. It has been steadily increasing its numbers and influence on the global stage. Founded in 2006, the group’s primary objective is to counterbalance Western-dominated financial and political institutions. With a combined population of over 3 billion people and some of the world’s largest and fastest-growing economies, BRICS represents a significant bloc in international affairs.

BRICS+ and Gold

As retail investment in gold declined, BRICS+ purchasing has been pushing the price of gold to new levels. The World Gold Council reported that BRICS+ has been the largest buyers of gold since 2022.

Data from the World Gold Council show the largest buyer was the People’s Bank of China. Except for a pause this spring, China has been expanding its gold reserves every single month since October ’22. Russia is also aggressively bulking up its gold reserves. Gold now represents 29% of their total reserves, up from 11% just six years ago.¹

²

Gold and the Weaponized Dollar

Vahan Roth is executive director at Swissgrams AG. His latest analysis posits that gold’s rise is a reaction to the weaponization of the U.S. dollar.

“The world reserve currency…can and will be used as an offensive weapon in geopolitical conflicts,” he wrote. “That same weapon that has been wielded against Russia could be deployed against any other adversary.”³

In response, the BRICS+ alliance is pushing back against the U.S. They want to be able to defend against a weaponized dollar by shifting reserves to gold.

BRICS+ Currency

The BRICS+ path to de-dollarization doesn’t stop with protecting their reserves with gold. They are making significant strides in launching a new currency. The currency would be backed by gold and act as a counter to the U.S. dollar. The nine-member alliance is planning a big announcement about the currency at its October summit.

Some financial experts believe that a gold-backed currency could spell the “beginning of the end” for the US dollar. Developing countries could distance themselves from the dollar, and US influence, by embracing the currency for reserves and cross-border transactions. ⁴

A gold-backed currency would provide a stable alternative. It could reduce the reliance of BRICS+ countries on the U.S. dollar and protect their economies from dollar fluctuations.

The rise of a competing currency is coming at a time when faith is being lost in the greenback. A gold-backed currency would provide a tangible basis for value and stability. In contrast, the U.S. dollar, like most modern currencies, is a fiat currency, meaning it is not backed by any physical commodity. The U.S.’s growing national debt recently reached $34.4 trillion. Concerns are rising about the long-term stability of the dollar. These concerns are among the reasons the BRICS+ are seeking more secure alternatives.

A New Way to Pay

The BRICS+ are already creating a system to rival the SWIFT payment system. The SWIFT payments system enables financial transactions between banks and other financial institutions. Russia was excluded from the SWIFT system after it invaded Ukraine. This effectively isolated Russian financial institutions from global markets. Russia’s exclusion reinforced the need for a financial system outside of Western control.

“The financial agenda of BRICS has a main initiative for building a new economic reality…Creating our own financial messaging system for the BRICS countries, similar to SWIFT,” Alexander Babakov, Deputy Chairman of the Russian State Duma, said.⁵

Implications

The shift away from U.S. dollar dominance erodes America’s default higher standing in the world economy. Destabilizing this position could hurt foreign exchange rates and international lending practices. Reduced demand for dollars could lead to a decline in the currency’s value. The devalued dollar can lead to hyper-inflation, leading to higher prices for imported goods and everyday purchases. In addition, the shift could expose and worsen existing vulnerabilities in the U.S. banking sector, heralding a new crisis.

Conclusion

We are moving to a multipolar financial world with multiple currencies and monetary systems. The era of U.S. dominance looks to be ending. For the BRICS+ nations, these initiatives are not just about economic pragmatism; they are also about asserting greater influence on the global stage. Consequently, the falling value of the dollar would severely impact the worth of dollar-denominated investments like stocks and bonds. In comparison, the price of gold is likely to increase as it used to back a growing currency. That’s why owning physical precious metals in a Gold IRA can not only protect the value of your savings over the long term, but it could also potentially grow them. To learn more, contact American Hartford Gold at 800-462-0071.

Notes:
1. https://www.kitco.com/news/article/2024-07-24/brics-driving-new-gold-rush-china-russia-gold-backed-currency-would-mark
2. https://www.centarzlata.com/wp-content/uploads/2023/08/BRICS-zlato-graf.jpg
3. https://www.kitco.com/news/article/2024-07-24/brics-driving-new-gold-rush-china-russia-gold-backed-currency-would-mark
4. https://watcher.guru/news/brics-gold-backed-currency-is-beginning-of-the-end-for-us-dollar
5. https://www.tekedia.com/brics-announces-plan-to-ditch-swift-create-alternative-financial-system/

 

• Financial gurus are going long on gold, expecting its upward trajectory to continue
• Central bank buying, recession, record debt, and renewed Western investment all fuel the rise in gold prices
• Now may be the opportune time to add physical precious metals to your portfolio in a Gold IRA before prices rise again

Gold Predicted to Rise Even Further

As global financial markets face heightened volatility and uncertainty, many investors are turning to gold as a safe haven asset. Prominent figures like Robert Kiyosaki and experienced traders from “The Big Short” fame have made bold predictions about the future of gold, citing various economic factors that could drive its value significantly higher.

Kiyosaki Warns of a Crash

“Rich Dad Poor Dad” author Robert Kiyosaki has warned of both a massive market crash and a subsequent money-making opportunity. He recently stated, “Technical charts indicate the biggest crash in history coming. Prices of real estate, stocks, bonds, gold, silver, & bitcoin crash.” Kiyosaki suggests that a market crash could be devastating, considering the extensive exposure of investors. For comparison, Americans lost about $16 trillion in net worth during the financial crisis of the late 2000s.¹

Kiyosaki believes that after the crash, there will be an excellent time to buy assets at bargain prices. He forecasts a significant bull market cycle benefiting gold, silver, and bitcoin, driven by a lack of confidence in US currency. The country’s debt could destroy faith in the currency, drastically devaluing it.

Kiyosaki made bold price predictions for after the crash: “Gold possibly $15,000 an ounce, silver possibly $110.00 an ounce, and bitcoin easily to $10 million per coin,” he wrote. Given that gold currently trades at $2,424 per ounce, silver at $29 an ounce, and bitcoin around $66,200 per coin, this forecast implies a 519% upside in gold, a 279% upside in silver, and a staggering 15,000% upside in bitcoin.²

“Big Short” Traders Back Gold

Other traders, such as “The Big Short” investors Danny Moses, Vincent Daniel, and Porter Collins, are also going long on gold. Known for their successful bet against the housing market ahead of the 2008 crisis, these traders have expressed concern that Americans do not hold enough gold in their portfolios. Collins pointed to massive central bank buying and the US budget deficit as reasons to buy gold, leaning heavily on the dollar debasement thesis. This thesis argues that the value of the US dollar declines over time due to excessive money printing and inflation, eroding purchasing power.

“If you just think about that one dollar in your wallet, tomorrow it’s worth less,” Collins added. “I think that in … one, two, three, five, 10 years, you’re going to make a lot more money in gold than you will in U.S. Treasurys, and I think that’s just not changing.”³

Gold’s Performance

Gold has been a better investment than stocks, bonds, or real estate this year, according to Morningstar. Since January 1, gold has provided a 14% return compared to 12% for the S&P 500 index of large U.S. stocks and 2% for the S&P 600 index of small U.S. stocks. Meanwhile, the iShares Core U.S. Aggregate Bond index fund is down 1%, and real estate investment trusts (REITs) have lost nearly 5%.⁴

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However, the real, inflation-adjusted price of gold is almost twice the average since it began floating freely in 1975. It is close to the peak seen during 2011. Since the dollar has also been rising, gold is even higher in other currencies. In both Japanese yen and British pounds, today’s gold price is about 45% higher than the peaks seen back then, even when adjusted for inflation. ⁶

Interestingly, U.S. investors have mostly missed this latest gold boom. Despite gold proving a better investment than 10-year U.S. Treasury bonds for over 30 years. Treasuries are actually losing their status as the unquestioned “go-to” safe asset. Questions about US creditworthiness and a growing de-dollarization movement are eroding confidence in the government bonds.

U.S. investors have been net sellers of exchange-traded bullion funds so far this year, totaling $4 billion according to the World Gold Council. Analysts attribute this to investors not wanting to miss out on a booming stock market.⁷

Gold Drivers

Central banks continue to be the leading buyers of gold. When Western investors catch up, analysts foresee another significant leap in gold prices. Despite breaking all-time highs, gold is considered underpriced for several reasons. The economic landscape has shifted significantly in favor of gold, with the value of gold compared to the dollar increasing more than the markets expected since 1980 or 2011. The impact of returning Western interest could be substantial. From 2005-2011, flows into GLD (the largest gold-backed ETF) added approximately 38.1 million ounces, driving the metal price from $535 to over $1,800, more than a 300% increase.⁸

A recession, which many indicators suggest is inevitable, would cause demand for gold to surge. Evidence of a weaker economy seems to be ignored by investors looking to ride the stock market as high as the bubble will go. Some economists argue that massive government spending is the only thing propping up the economy, the same spending that jeopardizes the country’s creditworthiness and raises the risk of more inflation.

According to certain analysts, gold is in the middle of a multi-year advance. Geopolitical conflict, stock overvaluation, and volatile U.S. elections all contribute to safe haven demand for gold.

Conclusion

The consensus among numerous sources is clear: gold’s upward trajectory is likely to continue for years to come. Continued central bank buying, fears of dollar devaluation, and a hedge against stock volatility and recession are just some of the factors driving this trend. Another surge in gold prices is expected when Western investors, currently caught in the stock market bubble, match the enthusiasm of their non-Western counterparts. Now may be the opportune time to add physical precious metals to your portfolio in a Gold IRA before prices rise again. Contact American Hartford Gold at 800-462-0071 to learn more.

Notes:
1. https://moneywise.com/investing/investing/robert-kiyosaki-predicts-up-to-15000-upside-in-these-3-assets-foresees-long-term-bull-market-cycle
2. https://moneywise.com/investing/investing/robert-kiyosaki-predicts-up-to-15000-upside-in-these-3-assets-foresees-long-term-bull-market-cycle
3. https://www.cnbc.com/2024/07/27/big-short-traders-are-very-long-gold-say-moses-collins-and-daniel.html
4. https://www.morningstar.com/news/marketwatch/20240524255/yikes-golds-2400-price-tag-is-even-higher-than-you-think
5. https://www.kitco.com/opinion/2024-07-26/us-dollar-decline-and-fall
6. https://www.morningstar.com/news/marketwatch/20240524255/yikes-golds-2400-price-tag-is-even-higher-than-you-think
7. https://www.morningstar.com/news/marketwatch/20240524255/yikes-golds-2400-price-tag-is-even-higher-than-you-think
8. https://www.kitco.com/opinion/2024-07-26/us-dollar-decline-and-fall