Gold Crosses $3,300 an Oz

Gold has now crossed $3,300 an Oz, as the best 'safe haven" asset in backdrop of quickly weakening global economy.

Gold is now raising even more faster, as the global Central Banks cut interest rates due to fear of recession, trade wars and geopolitics.

Central Bankers are panicking. 

The US Dollar has crashed, with DXY at 99.09 and fallen from 110.1, and 10% crash from just two and half months ago.  This means the US Dollar has lost 10% of its purchasing power in just 90 days. This even when short term interest rates are at 3.75%-4.0%. When the short term interest rates go down below 1.0% which is highly likely within next 12 months due to darkening economic backdrop in US. 

This would crash the value of DXY even further to as low as 80.0. That is good for both Gold and US exporters (Boeing, Starbucks etc.), but inflationary to US consumers (bad for Walmart, Amazon etc.). 

Gold At $3,200 an Ounce

Gold has formed a new base, at $3,200 an Oz. 

Chaotic rollouts and withdrawals of Tariffs by the US Admin, have made the markets chaotic and the already over valued stock and bond markets in the US, are now completly controlled by the President - this is very dangerous as the financial markets in the US are no longer independent or free markets - and are totally dependent on the government's, especially Presidential decisions. 

This is the reason the US dollar is collapsing, having declined 10% in value within 3 months. 

While this could actually be the plan by the US government to devalue the Dollar, to bring back jobs to US, and raise American Exports (like Boeing Airplanes, Hollywood Movies, or even Starbucks Coffee) all of which would  benefit from a weakened or falling Dollar.

This very same reason, is good for Gold as well - Gold would benefit from a falling or weakened Dollar, and therefore Gold prices would now go up even much higher.

Gold Proves It's Resiliance

After the famous US 'Liberation Day'  Tariff Annoucements, on 2nd April, 2025 -

• Global stock markets have been pummelled by double digit crashes within 3 days
• $10 Trillion Dollars lost in global stock markets, with $6 Trillion Dollar lost in US alone, within 2-3 days 
• For first time in history, we are seeing Multi-Trillion dollar daily losses in stock markets 
• Globally and in US, all key indices have entered bear market territory with a few days
• Though the markets are slightly recovering by Tue, 8th April - this is more like a bear market bounce and not really a new bull market - Bear markets can have huge head fake rallies, compared to bull markets, so one needs to be careful.
• Crypto Currencies have also taken a huge hit 

Even in this scenario, Gold is holding high with only ultra-small minor corrections, and holding the neck high above $3,000 per Oz.

This proves the resiliance of Gold.

For the first time after 1971, Gold has become 'Flight to Safety' or 'Safe Haven' when everything else is falling like Gold historically was during the Gold Standard era before 1970.

Gold at $3,000 an Oz

Gold seems to have now found a new floor within this month - this time it is $3,000 an Oz. 

We have been following Gold, since it was $2,100 an Oz two years ago and we can see that the psycological level of $3,000 has been breached successfully.

Nevertheless, Gold is still cheap currently, when compared historically as Gold prices were much higher in 1970s and even in 2000s when Dollars and other fiat currencies had more value. 

Gold has found a floor at $2,900 per Oz even with High Bond Yields

Gold is becoming a killer asset. 

I've never made such a bullish statement on Gold in atleast the last 10 years, until today, and have always been cautious in last 10 years as Gold went through some real challenging phase after 2013 upto 2019 and then again from mid-2021 to late-2022. 

However now I can say, we are at the cusp of a Precious Metals Super Bull Cycle.

• US debt is out of control
• Developed economies in deep services inflation 
• Global stock bubbles like the AI Bubble etc. 

While as a Gold investor I'm actually very HAPPY to see all this. 

All this global indebtedness, equity stock market bubbles like the AI bubble and the resulting chaos is very good for Gold.

Gold loves chaos.

Gold goes past $2,700 per Oz

Gold has now gone past $2,700 per Oz for Dec 2024 futures, and all this is happening after interest rates have started falling globally. 

Globally among the developed countries - their governments, most of their corporations and citizens have accumulated huge unsustainable debt, and hence central banks can't keep interest rates higher for longer. Already, central banks like the US Federal Reserve have done a lot of damage to its citizens, corporations and government by keeping interest rates unsustainably higher for longer, and now are forced to rapidly cut interest rates to reduce further damage. The effects of the damage itself which is already done, will only be visible in coming months. 

Hence we can expect further jumbo interest rate cuts in coming months, across the developed world which would put upward pressure on gold prices to raise higher.

The fact that just the first interest rate cut in the US, has pushed the gold prices to $2,700 per Oz, and further maniac interest rate cuts which are nevertheless coming, given huge debt levels - gold prices would only be under pressure to go higher above $3,000 per Oz pretty soon.

 

Gold has found a strong floor at $2,500

Since March - April of 2024, globally the financial markets have seen extreme increase and decrease in rate of volatility (as measured by financial market volatility index - VIX), like it happened in mid-April or in early August. Even during these periods Gold held steady.

Also not to mention that Gold has been mostly trading above $2,500 per Oz during this period since March -April 2024.

To be sure, while Gold has been strong, staying above the milestone of $,2500 per Oz, if there is a major event like a financial crises, or a global recession, or a sudden surge/spike in inflation, or higher interest rates staying higher for longer than anticipated - under all these circumstances financial markets will be impacted not mildly but significantly with dire consequences in  the aftermath. Gold however will be mildly impacted, and might go below $2,500 per Oz, or in a worst case scenario all the way down to $2,000 per Oz which is a 20% drop consistent with past US recessions like in 2008 or 2000-2001. 

However the good news is if Gold investors can ride this period without panicking, Gold has potential to be a multi-bagger - go 5x-6x higher in the aftermath of this financial event.  Between 2001 to 2011 in aftermath of 2000-2001 recession - Gold went up from $250 (yes two hundred and fifty only) per Oz in 2001 to $1,950 per Oz in 2011 - a 9x-10x multi-bagger in just one decade.