Are We At The Beginning of A New Historic Supercycle For Gold?

Phil Carr
Published: Mar 8, 2024, 15:51 GMT+00:00

As Gold prices continue their upward surge, breaking new all-time record highs on a consecutive daily basis – analysts at GSC Commodity Intelligence are calling the beginning of a “new era” for the precious metal.

In this article:

Gold Shines Bright Amidst Stock Market Bubble

There is no denying that Gold is everyone’s favourite trade when terms like “Stock Market Bubble”, “Interest Rate Cuts” and “Operation-Twist” begin dominating the headlines – just like we’re seeing right now.

This week, Google searches for the words “Stock Market Bubble”, reached their highest level since January 2022, which is understandable given how frothy the stock market has become.

But here’s the interesting part – according to real-time data tracked by GSC Commodity Intelligence – there is a strong correlation emerging between the rise in searches for the words “Stock Market Bubble” and capital inflows into Gold – solidifying the precious metals reputation as the ultimate portfolio hedge.

Gold has been on a parabolic run since the beginning of October last year – rallying from near the $1,800 level notching up back to back all-time record highs this month – not once, not twice, but on multiple occasions.

On Friday, Gold prices set a new record high of $2,170 an ounce to surpass the yellow metals previous all-time high of $2,159 an ounce reached only a day earlier – extending its gains by a whopping 21% since October.

Is The Rally Over And Has All The Money Been Made?

Not by a long shot! Once you take a look at the bigger macro picture, conclusive evidence shows that the stars appear to be aligning for Gold.

The precious metal being firmly supported by “a multitude of bullish tailwinds” including persistent geopolitical tensions. Growing instability in China’s economy and financial markets, leaving investors with no other option, but to pile into Gold at one of the fastest paces seen since the Global Financial Crisis.

Continued Gold purchases from Central Banks around the world exceeding 1,000 tons for two consecutive years – pointing to a third straight year of strong demand in 2024.

And last but definitely not least – the global pivot towards interest rate cuts with the European Central Bank, Bank of England and Federal Reserve inching closer to their first rate cuts in June.

In recent days, an influential list of Wall Street banks raised their price forecasts calling a probability of Gold averaging a record $2,300 an ounce in the second half of 2024. While, the most bullish predictions came from Citi – reiterating their view for prices to top $3,000 an ounce over the next 12 to 16 months.

Whichever way you look at it, one thing is clear. The macroeconomic backdrop for Gold in 2024 is looking more bullish than ever before. In a note to clients, analysts at GSC Commodity Intelligence wrote “that the precious metals recent glittering performance points to a tell-tale sign, which indicates we could be at the beginning of a new historic Supercycle for Gold”.

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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