Top Three Videos – April 16, 2024

The price of gold has experienced a breakout and has strong potential for growth due to various factors such as inflation concerns, shifting market involvement, increasing demand, and potential for a “perfect storm” in the market.

Factors influencing the price of gold

• The price of gold has experienced a breakout over the past month and a half, signaling potential concerns about higher inflation or capital fleeing to safety.
• The breakdown in correlations between tips versus real rates and ETF flows is interesting and could indicate a shift in the involvement of western investors in the gold market.
• The shift from jewelry to bullion in China may indicate a perfect storm for gold, with strong demand from central banks and people looking to protect their purchasing power.
• Gold tends to do well when it anticipates easing, and the market would price in more severe cuts in the event of a crisis, creating the potential for a “perfect storm.”
• The fiscal deficit and high debt-to-GDP ratios may push the FED into a corner, raising questions about how they will manage their balance sheet and the long-term impact on the economy.
• Gold breakout could be the real deal, with a lot of tailwinds behind it, especially if the US retail investor shows up.
• The gold-silver ratio could potentially drop to 65, putting the silver price at $50 to $60.
• The increase in gold price over the last three to six months is dropping to the bottom line, as costs are not increasing at the same rate.
• Scarcity and increasing demand for gold globally are driving the price higher, making it a good investment for the long run.

   

Implications for the gold industry and market

• Gold miners are projected to generate double-digit cash flow yields, indicating a healthy outlook for the industry.
• Large gold mines are difficult to replace, leading big companies to diversify into copper due to the challenge of finding gold mines with the size and life they’re looking for.