from Birch Gold Group:
From China’s buying spree to dollar devaluation fears, gold’s surge past $3,000 may be just the beginning. As global demand explodes and trust in fiat currencies crumbles, is $4,000 gold just the new floor of a multi-year bull market?
Your News to Know rounds up the most important stories about precious metals and the overall economy. This week, we’ll cover:
- Expert trader: “Gold is trading in a range between $3,000 – $4,000”
- Onlookers believe China drove gold to its recent all-time high…
- …and why gold is doing even better in India
TRUTH LIVES on at https://sgtreport.tv/
Gold’s new normal: $3,000 to $4,000 range doesn’t sound bad
A trader recently considered whether a pullback to $3,000 or a breakout to $4,000 gold price is likelier to happen next. (This tells us all we need to know about how far currency debasement has gone.)
Gold’s price primarily reflects the strength or weakness of the U.S. dollar, effectively an unofficial inflation rate report. Gold price can tell us a lot more, extending into structural concerns about the global financial system.
When your currency is exceptionally weak globally, it tends to really blow up in terms of ounces-of-gold local denominations. That we are anticipating a range as high and wide as $3,000 – $4,000 suggests an unpleasant future for our currency…
The mighty greenback we once spread across the modern world based on its convertibility into gold, then based on trust and faith, is now turning into – maybe it’s a bit harsh to call the dollar a “pyramid scheme,” but there are similarities.
Our analyst said a worst-case scenario sees gold falling as low as $2,800. For those of you who don’t watch gold’s price as closely as I do, $2,800 was where gold was trading back in February. That’s right – over the last three months, gold has risen about 5% ($125) per month.
And should that trend continue? We’re looking at $4,000 gold before the end of the year.
After Alasdair Macleod, there is now another voice in the mainstream raising awareness on structural weakness of the U.S. dollar.
Will Rhind, CEO of GraniteShares, noted how the historically-tight correlation between money supply and gold price has collapsed. While the dollar supply has expanded, that alone hasn’t been enough to warrant this kind of gold price surge.
So the gains in gold must be coming from weakness on other fronts. If we rule out money-supply-related dollar weakness, what else could be driving gold price higher?
- Counterparty risk: The concern that the federal government will fail to honor those $36 trillion in debt, either through outright default or a technical default (like exchanging old debt for new, 100-year, 0% debt)
- Dollar devaluation: Anticipation of an imminent, formal devaluation of the dollar (also known as the “Mar-a-Lago Accords,” a topic we haven’t yet discussed in detail)
- Dedollarization: An ongoing global transition away from the dollar as global reserve currency, in favor of “alternative currencies” (including gold bullion – Rio Reset, anyone?)
- Demand for physical gold: From central banks, institutions and individual investors – although, recently, investor demand for physical gold has been relatively muted
Recently, both Bloomberg’s Mike McGlone and Bank of America forecasters have gone public with $4,000 gold forecasts before the end of 2025.
What next? Christopher Aaron, founder of two investment firms, says this gold bull run should continue for another three to 10 years. He reminds us that gold bull markets last eight years on average.
So if you’re worried about “missing the boat” now that gold’s price seems well established above $3,000 – relax – there’s a lot more upside ahead. Of course, you’ll want to make your move sooner rather than later…
China may have driven gold to its latest all-time high – what’s next?
As a country that’s known for consumer demand, seeing China’s gold coin and bar purchases surge 30% year-on-year is a very clear signal.
It tells us, and others, that China is bidding the metal up. But China is far from alone!
Adrian Ash, director of research for a UK-based competitor, told Newsweek:
“The U.S. is clearly the epicenter of what’s been driving gold prices in terms of global geopolitics and trade tariffs and his threat to sack Jerome Powell, all this stuff. But domestic U.S. investors as yet don’t seem to be as anxious about that. They’re not turning to gold on a comparative basis in the same way that we’ve seen Western Europe do.
“In the UK, Germany, and Spain – especially last month was notably up – you’re a long way ahead of the five-year average for the monthly number of new first-time gold investors. The U.S. is up about 39-40% above its five-year average, which is a change, but it’s not like the 120% move that we’ve seen in the UK or Germany.”
In the U.S. gold is now the #2 most trusted asset (second only to real estate, the perennial investor favorite).
Others go far enough to call it China’s bet on $5,000 gold. Volume on the Shanghai Gold Exchange is mentioned, with funds piling into the speculative side of things. This day trading activity is met by equal or greater vigor on the retail side, which continues to increase the premiums on gold jewelry – despite steep prices, buyers just can’t get enough.
Investment demand, such as coin and bar, is a centerpiece talking point here, same as here in the West.
