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In recent months, gold prices have surged, breaking through new all-time highs and holding steady above $2,600 an ounce. With inflation continuing to eat away at purchasing power, and uncertainty looming over global markets, the importance of gold in protecting wealth has never been clearer. But what’s driving this latest gold rally, and how should savvy investors respond?

We turn to experts like Brien Lundin, editor of the Gold Newsletter, to gain insight into the state of gold, the Federal Reserve’s actions, and what it all means for the US dollar decline.

The Gold Rally: A Long Time Coming

Gold has experienced a substantial increase in value this year, rising over 27%. While this is exciting news for gold holders, the reasons behind this rally are worth examining closely. According to Lundin, much of this can be attributed to the Federal Reserve’s ongoing policies, particularly its anticipated pivot towards more rate cuts. The Fed’s actions have historically influenced gold prices, but what’s happening now runs deeper.

The drop in the dollar index, which measures the value of the US dollar against a basket of other currencies, has mirrored gold’s rise. When the dollar weakens, gold typically strengthens, as investors flock to it as a hedge against the declining purchasing power of fiat currencies. This inverse relationship between gold and the US dollar is a critical factor behind gold’s current bull market.

The Silence of Mainstream Media

Despite gold’s remarkable performance, mainstream media outlets like CNBC and Bloomberg have been surprisingly quiet about the rally. This absence of coverage raises important questions: Why is the media focusing on Bitcoin hitting $1 million instead of discussing the surge in gold prices? As Lundin points out, major financial media are often sponsored by big cryptocurrency interests, which may explain their reluctance to highlight gold’s rise. However, ignoring gold’s success doesn’t change the reality that it is outperforming nearly every other asset class in 2024.

For those looking to protect their wealth, particularly in the face of a US dollar decline, this silence on gold could present an opportunity. As more investors recognize the strength of gold, the window to enter the market at relatively low prices may be closing.

Physical Gold vs. Mining Stocks: What’s Right for You?

Investors often ask whether they should buy physical gold or invest in gold mining stocks. Lundin’s advice is clear: if you’re buying gold as insurance against the inevitable decline in the value of your home currency, then physical gold is the way to go. Gold’s role as a store of value means that holding the physical metal can lock in your wealth against the depreciation of the US dollar and other fiat currencies.

For those looking to leverage the rally and seek potentially higher returns, investing in mining stocks may be more appealing. As Lundin explains, the gold mining sector is now seeing increased interest from Western investors, with the GDX Mining Share Index showing outperformance compared to gold itself. This marks the beginning of the next leg in the bull market, where investors in gold-related equities could see significant gains.

However, Lundin also warns that the time to act is now. Whether you are buying physical gold or mining stocks, delaying your decision could mean missing out on the current low prices.

The Future of Gold: Could It Hit $3,000?

While predicting exact price movements is always challenging, many banks have revised their forecasts, with some like Bank of America projecting gold could easily reach $3,000 an ounce. Lundin agrees that this target is realistic, especially when we consider historical bull markets. Past trends suggest that gold could eventually hit as high as $6,000 to $8,000 per ounce. The timing remains uncertain, but the trajectory is clear: gold prices are headed upward.

In part, this climb in value reflects the decline of the US dollar. Fiat currencies, particularly the US dollar as the world’s reserve currency, are losing purchasing power. As federal debt continues to rise and deficit spending remains unchecked, the dollar becomes increasingly devalued. This trend puts even more pressure on investors to find safe havens like gold to protect their savings and retirement funds.

What Investors Should Do Next

As we look ahead, it’s clear that the financial landscape is shifting. With inflation still present, a potential recession looming, and the US dollar decline accelerating, investors are wise to consider gold as a core part of their portfolio.

At ITM Trading, we’ve been guiding our clients through times of economic uncertainty for over 28 years. We understand the critical role that physical gold and silver play in protecting wealth from inflation, market volatility, and currency depreciation. Whether you’re new to precious metals or a seasoned investor, we’re here to help you make informed decisions.

To learn more about how gold can safeguard your financial future, we encourage you to contact us for a free strategy session.

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SOURCES:

• https://x.com/brien_lundin?lang=en
• https://www.google.com/finance/quote/GCW00:COMEX?sa=X&sqi=2&ved=2ahUKEwj40_21neWEAxUEHkQIHb1XC4kQ3ecFegQIDRAX&window=MAX
• https://www.google.com/finance/quote/GDX:NYSEARCA?sa=X&ved=2ahUKEwi42Lzf8dmIAxVTJ0QIHcMvD-4Q3ecFegQIThAX&window=MAX
• https://fred.stlouisfed.org/series/GFDEBTN#
• https://www.youtube.com/watch?v=gUAjraeZITY
• https://www.foxbusiness.com/politics/billionaire-hedge-fund-manager-says-he-would-pull-his-money-from-market-harris-wins-election
• https://www.youtube.com/watch?v=_Qor7zXKtMI
• https://www.youtube.com/watch?v=QTEPEO4f4kQ
• https://neworleansconference.com/speakers/