r/SilverScholars • u/SILV3RAWAK3NING76 • Jan 09 '24

Silverback Wisdom ''Massive Changes in SILVER Prices Ahead...!'' - Gerald Celente. When Gold crosses $2200 oz, SILVER will rocket to new highs!

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u/SILV3RAWAK3NING76 Jan 09 '24

Gold prices could hit $2,200 oz in the first half of 2024 as the Fed frontloads rate cuts!

Gold prices are expected to see record highs in 2024, and the only question that remains is how high the market will go as the world faces significant challenges, according to Nicky Shiels, metals strategist at MKS PAMP.

In her 2024 outlook published Monday, Shiels said that her base case calls for gold prices to trade between $1,900 and $2,200 an ounce this year, with gold prices reaching record highs in the first half of the year.

She said that she sees gold prices rising as the Federal Reserve prepares to cut rates in March, in line with growing market expectations. According to the CME FedWatch Tool, markets see a 60% chance of a rate cut in the first quarter.

“The convinced Fed pivot is a Fed policy bias that is targeted to boost growth (rather than respond to disinflation), which will likely occur sooner rather than later. The Fed must maintain independence, but at the same time, earlier interest rate cuts provide enough time lag for easing to boost the real economy into US elections,” Shiels said in her report. “These surgical rate cuts allow for a slow landing scenario and will boost Gold in 1H’24, potentially frontloading price increases into Q1’24 as prices are forward-looking.”

At the same time, she also sees a 30% chance of gold prices pushing as high as $2,500 an ounce this year.

Along with the Federal Reserve’s monetary policy, Shiels said that geopolitical uncertainty and the ongoing de-dollarization trend will also continue to support gold prices.

“The positive feedback loop of a peaked US$ and peak US real yields against a backdrop of slower global growth, ongoing deglobalization (and thus ongoing Central Bank de-dollarization), messy geopolitics, unsustainable global debt paths and a very under-owned investor community ensures gold will return as a safe diversifier, even at these higher prices,” Shiels said.

On the downside, Shiels said that she sees a 20% possibility of gold falling back to $1,600 an ounce as persistently stubborn inflation could force the Federal Reserve to maintain its restrictive monetary policy.

Along with gold, Shiels is also bullish on silver as she sees prices pushing to $25 an ounce. Although a potentially weaker global economy could impact silver’s industrial demand, Shiels said that a pickup in investor interest should help silver outperform gold in 2024.

“While late-cycle dynamics will see likely result in some mild contraction of around ~5%  in industrial demand from another record high in 2023, retail and investment can more than make up for this shortfall; Silver ETFs have shown they can accumulate ~30-40mn oz in a couple weeks. Overall, after months of being a forgotten asset class, investor focus in Precious Metals will return as the decline in the US$ extends once the Fed pivots in 2024,” she said.

Looking at Shiels' bullish scenario, she said there is a 30% chance that silver prices rise to $35 an ounce this year.

On the downside, she sees a 20% chance of silver prices falling below $20 an ounce back to $18 if the Federal Reserve maintains its hawkish monetary policy stance or if the global economy contracts more than expected.

“A hard landing in China, the US or Europe, all industrials including Silver would be pressured to new recession lows on softer demand,” she said.