In 2024, the gold market is going to create history. It is quite close to reaching a new all-time high as we start the new year.
How far will gold rise? A lot relies on how low the US dollar and interest rates drop.
The rate-hike campaign by the Federal Reserve was terminated last autumn. Later this year, monetary easing is anticipated to take place.
Gold and other hard assets should benefit from this.
Naturally, there is still a lot of uncertainty about the state of the economy, inflation, and interest rates. The stock and bond markets may collapse if central bankers are forced to hike interest rates due to ongoing inflationary pressures, possibly briefly dragging the precious metals markets with them.
In the run-up to the presidential election at the end of the year, market volatility may also rise.
The election’s legitimacy has already been called into question due to biased judges and prosecutors who have threatened to imprison the primary opponent of incumbent President Joe Biden and efforts by some state election officials to remove former President Donald Trump from the ballot.
Some commentators have warned that if the election’s announced victor is thought to have rigged it, something akin to a civil war may break out.
Regardless of the result, there are more concerns about how the political system will handle the mounting financial crisis. There are no practical measures from the ruling parties, either Democratic or Republican, to reduce expenditure, balance the budget, or pay off the debt.
The interest on the debt alone will cost the government more than $1 trillion by 2024.
Social Security and Medicare are quickly approaching bankruptcy and represent trillions more in unpaid liabilities when the national debt surpasses the $34 trillion threshold.
There is never a tax increase large enough to pay for these enormous commitments. Furthermore, political realities dictate that promised benefits will never be withheld and that spending will never be reduced.
A turning point is about to occur. In 2023, rating agencies cut the US government’s credit rating twice.
But the Treasury Department can always “borrow” money into existence under our fiat monetary system by piling bonds onto the Federal Reserve’s balance sheet.
To pay its bills, the government inflates the supply of currency.
Keeping tangible gold and silver can help you maintain your purchasing power in the face of currency devaluation that is only going to become worse.
Precious metals are rare in contrast to fiat Federal Reserve Notes. In fact, by 2024, their supply constraints will only get worse.
Big producers of palladium, platinum, copper, silver, and gold are having difficulty keeping up with growing operating expenses and decreasing reserves.
The metal is becoming more and more in demand from investors, consumers, and businesses as mine output reaches a limit.
The demand for investments in gold and silver markets is unpredictable. After the COVID-19 pandemic, it increased, but in 2023, it began to decline as investors were drawn to money market funds by higher interest rates, and the perceived safe-haven value of bullion was diminished by expanding equities.
That could alter in 2024. Those who want to safeguard their wealth must own tangible precious metals due to the possibility of a Fed rate drop, the uncertainty surrounding the election, and the mounting debt crisis.
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