Gold is actually starting its second rally, and $3,000 is not far away Investors concerned that gold prices may be overextended have nothing to fear as a new set of drivers are propelling the precious metal into another distinct rally, and this one will blow through $3,000 in short order, according to Dylan Smith, Senior Economist at Rosenberg Research.
In an interview with the Financial Post’s Larysa Harapyn on Wednesday, Smith was asked whether he believes the gold rally can continue after the yellow metal has already risen so far so fast. He replied that gold is actually seeing two separate rallies, each with its own distinct drivers, which means that the next stage of the bull market is only just beginning.
“I think we've seen a very big leg up in gold over the last week since the Fed [delivered] its big 50 basis point rate cut,” Smith said. “That's something we had expected to be coming for some time. But I think an important thing is happening in the gold market in terms of a big change in what's driving the gold price compared to the big rallies that we saw at the beginning of this year, so that's why we're fascinated by what's going on and we think there's more to come.”
Smith said that Rosenberg Research has held a price target of $3,000 or more for some time, and they don’t see much risk of a correction. In fact, they see more momentum coming.
“That early rally in the first part of the year, and then the more recent rally, we're at a point where there've basically been two separate 14% to 15% moves in gold,” he said. “The drivers we saw at the beginning of the year, driving that first 14 or 15% up, was all what we'd call New World gold drivers. We saw enormous demand from central banks, which is still there and still underpinning high gold prices. We're seeing a lot of cautionary demand from emerging markets where risk of de-dollarization is quite real, places like Turkey where inflation is running very, very high. We're seeing key jewelry markets like India seeing enormous income growth. This is all putting real, fundamental tailwinds under the gold price.”..................
https://www.kitco.com/news/article/2024-09-25/gold-actually-starting-its-second-rally-and-3000-not-far-away-dylan-smith
