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.