This Will Send Gold Price Skyrocketing To All-Time Highs, Plus It’s Shocking What’s Unfolding in Europe
The comments below are an edited and abridged synopsis of an article by King World News
In 2023, gold will skyrocket to all-time highs. Long-term investors remain sidelined while they trust in the FOMC’s ability to bring inflation down. Once that trust breaks, the next leg up will begin.
Gold will find its footing after a challenging 2022, when many investors were frustrated by its inability to rally even as inflation surged to a 40-year high. Gold was held back by the market’s mistaken consensus that inflation would be transitory. Central banks largely anticipate that inflation will ease soon, and the market’s forward pricing of inflation risks predicts the same. And how was gold supposed to rally in 2022, especially in strong US dollar terms, if you can get over 4% on a 5-year US treasury at a time when 5-year forward inflation rates are priced to drop below 2.5%?
In 2023, the market will discover that inflation is here for the foreseeable future. Fed tightening and QE will pose a problem for US treasury markets that forces measures to contain volatility that amount to more QE. Chinese demand will drive a new surge in commodity prices, sending inflation soaring, especially in increasingly weak dollar terms as the Fed’s softening punishes the greenback. Under-owned gold will rip higher on the sea-change reset in forward real interest rate implications of this new backdrop.
Up for discussion: Gold receives a blast of support from three directions and rises above $3,000; Ukrainians flooding into Germany; and eight million Ukrainians already in Europe.
