Gold Price at $10k, Silver at $500

Gold Price at $10k, Silver at $500 Due to ‘A Decade of Shortage,’ Say Goehring & Rozencwajg

The comments below are an edited and abridged synopsis of an article by Anna Golubova

This will be a decade of shortage defined by high inflation and a failed attempt to raise rates, the perfect combo to trigger a massive rally in gold, said Goehring & Rozencwajg Associates managing partner Leigh Goehring.

Next year, inflation could be pushing 9%, and it could get a lot worse, Goehring said.

Fed Chair Jay Powell already shocked the markets by dropping the phrase that ‘inflation is transitory’ and stating that the Fed will be discussing accelerating the pace of tapering at the December meeting.

An inflationary black swan event could kick-start that inflationary psychology, which has been missing despite annual US inflation running hot at 6.2%.

There are too many similarities between now and the late 1960s and early 1970s that cannot be ignored. Back then, inflation was going up about 5%-6% per year, as it is now. And then, in 1973, there was the black swan event—the oil embargo.

That would be the perfect scenario for gold, Goehring said. “Once the precious metal bottoms from the Fed’s tightening action, it will begin its massive bull market.”

How big of a bull market will it be? Goehring is expecting gold to reach $10,000 by the end of the decade, and for silver to trade around $500 an ounce.

Silver is another quintessential inflationary metal to buy and hold during the next decade.

Inflation will get worse during this decade of shortages, and the underinvestment in the resource sector will play a big role. This will be highly inflationary, the Goehring said.

One key metric to watch is the bond market, which has so far largely dismissed the rising price pressures.