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$3,000 Gold An Easy Path For This One Reason

Blog May 24, 2024

“I think at the end of the year, gold would be $3,000,” says Phillip Streible, Chief Market Strategist at Blue Line Futures. Streible highlights several factors driving this prediction, including a downtick in CPI, central banks hoarding gold, and ongoing geopolitical tensions. He also anticipates the Fed will cut interest rates twice, in September and December. “It seems that the Fed is completely content with the elevated inflation right now and that they’re handcuffed from raising interest rates anymore,” Streible explains. Beyond gold, Streible shares his optimistic outlook on commodities like silver and copper, pointing to increased demand for electric vehicles and advancements in AI. “We’re seeing almost the perfect storm take place in many of these commodities,” he concludes.

CHAPTERS:

00:00 Fed interest rate cuts
2:41 Retail investors
3:46 Gold
5:19 Silver price
6:50 Copper
7:59 Platinum price
9:33 Bitcoin
10:27 Oil
11:58 Gold

TRANSCRIPT FROM VIDEO:

00:06
Daniela Cambone here for ITM Trading. Before we get to today’s incredible interview, I just want to take a moment to inform you that if you haven’t done so, I highly urge you to book a free session with one of my colleagues over at ITM Trading. You basically just need to book a Calendly appointment. It’s in the description below of the video. I always say it’s like a hidden Easter egg because it will just open your world to an incredible opportunity.

00:36
people willing and wanting to help you build a strategy focused and based around gold and silver and not just that if you have any questions about the content or want to discuss any of that in a more in-depth level they’re there to also help you. So like I say it’s a free session, it’s super informative and also fun.

00:55
That said, let’s get to today’s interview. Hi, this is Daniela Cambone. Welcome back to the Daniela Cambone show. And my main question for my guests today is how much more room is left for gold and silver to run? Joining me to talk about this and so much more. Phil Streible, he is the chief market strategist over at Blue Line Futures. Phil, so good to see you, my friend. How are you? I’m doing great. I’m so happy to be on your show. It’s been too long.

01:22
It has been too long, like I said, really good to see you and to get your thoughts because I don’t know where you’re seeing ahead for gold, but the people want to know. Above $2,400 as we’re speaking, how much more room does this market have, Phil? Well, I think the Federal Reserve, they just really pivoted. They changed their policy stance from being on this tightening cycle to now they’re pivoting.

01:47
to a neutral stance, and ultimately, I believe that we’ll get two interest rate cuts by the end of the year, one in September and one in December. Now, if you looked at just studies back testing since back to 1990, it’s indicated that gold futures have rose on average 6% within the first 30 days of that interest rate cut. So a 6% move, given where we’re at right now, is over $120. So I think that makes new leaps and bounds over the $2,500 in new contract highs.

02:16
I don’t anticipate that prices are going to come off much from these levels unless something dramatic changes, but it just seems that the Fed is completely content with the elevated inflation right now and that they’re handcuffed from raising interest rates anymore. And I think that the policy path going forward is going to be a bit more dovish. Are you seeing, that said, are you seeing the retail investor?

02:42
present in gold or do you feel people are on the sidelines here at these levels? No, I think that the retail investor has really come into the market and they tend to chase things a bit higher and that’s okay when you’re in a sustainable bull market. We’ve seen one of the largest speculative and fun long positions that we’ve seen in the last two years. There’s a lot of things that are going on in the background that are helping promote gold as far as.

03:07
We’re seeing the rise in geopolitical tensions. We’ve seen the increase central bank buying. Countries are trying to divest themselves from currencies that are depreciating because of the dilution effect. And I think that people recognize that, just the irrational fiscal and government spending that’s going on. It makes sense for an investor to kind of put themselves, put their money into more hard assets. Things are a little bit more inflation proof, whether it’s real estate.

03:37
you know, antique cars, collectibles or precious metals. I think it just makes sense to have a portion of your assets in that. Do you find it interesting where it’s debunking a lot of myths, Phil, that, Phil, that we have, you know, the U S dollar rallying gold rallying Bitcoin, as we speak, is rallying silver. I mean, everything is just rising, but you know, focusing on gold and the U S dollar, which historically have had an inverse relation

04:04
I mean, is this just debunking myths? I mean, do you find it interesting that everything’s just rising right now? It’s the rising tide that lifts all boats right now. So we’re seeing that, you know, the Fed is going to pivot. There is probably, we’ve probably seen the peak in the dollar index as of in this cycle right now, I believe that the dollars just remain elevated because of the chance that the Fed would have to raise rates if you saw input costs, like

04:32
things like that continue to travel higher, but there are quite a few cracks that are forming in the economy. So we’re seeing a deterioration in the labor market. The last payroll was like $175,000. They were expecting $275,000. There’s been an uptick in initial claims, a downtick in retail sales, not only in the US, but also in China. So it’s showing you that the consumer is starting to struggle here. So I think that…

04:58
As far as US equities are concerned, I think that we may be seeing some topping action around these all-time highs. It’s nice when all these products are at those levels because it allows the investor, the trader, whether they’re long-term, short-term, to really think about things and where they want to go and plan and prepare for the next cycle in the movement in any of these underlying assets. Having interviewed you for so many years, I know you’ve always been in the silver investors

05:25
camp rooting for them. And I mean, with silver, as we’re speaking, still above $30 an ounce, what do you see in store for silver here? I mean, is this finally the break that investors have been waiting for? I know. It’s like, it’s like, I feel like they’ve had everything stacked against them. They had manipulation for so many years. I feel like it’s, it’s bad to say that it’s like the rags, the riches, because I’m not saying that many of these, you know, silver investors are very sophisticated, very wealthy individuals. It’s just the fact, I think the

05:55
the leverage and the velocity behind it where we can go from something like it’s, it was like $22 like six months ago and I couldn’t get people to buy it. And then all of a sudden it shoots up $10 an ounce over this timeframe. And now we’re at $32. So the question is here, is there room to run in the silver market? And I think if you look at it, technically you look at something like stochastic, just, this is just like a technical analysis guy who would see that, Hey, we’re an overbought territory, but that just means that

06:23
we are in a bull market. I would only look for it to come out of oversold or overbought territory before I thought that we were going into a correction phase. Now, if you look at where all time highs are, around $50 in 2011, we’re still $18 behind that. In the last time we were at 32 bucks, it took about 10 weeks for us to get to that $50 level. So there could be a couple more months to run on this.

06:49
You say if you’re watching silver, you obviously got to pay attention to copper. Talk to me about that equation. Tell us what we need to know here. So I always say the secrets when you’re trading commodities, that there’s two characteristics to identify when investing. You want to look for a supply and demand imbalance and you want to look for market momentum. So the increased electrical power use because of the green energy revolution, along with rising demand for electric vehicles.

07:15
and advancements in AI, which seems to be new technology. It seems like every app I open up on my phone, there’s like an AI that’s running in the background. That is gonna strain not only the electrical grid, but also some of these electronics that are all gonna need to be upgraded. That combination pushes the demand for copper, silver, and other metallic metals higher. And that’s for the first time in a decade. And this comes at a time when increased regulations, because…

07:41
everyone’s so focused on the environment and everything, it becomes harder for additional supplies of copper, silver to come to the market here and end up at the end user that it creates this global deficit. So we’re seeing almost a perfect storm take place in many of these commodities. Perfect segue for my question, speaking of deficits, because there’s so much buzz around platinum and that we could really see a breakout in prices due to deficits that are gonna come and really crunch the metal here. Are you bullish?

08:11
the PGM space right now. Platinum, Palladium. I’m bullish on platinum, but it is one of the more difficult. And I mean, I’ve been trading in these commodity markets for 23 years. Platinum’s one of the more difficult markets. The same thing with Palladium, because of the news flow. It’s not like you could see like, everyone’s focused on initial claims. If we get an uptick in there, chances are gold prices are gonna go up. You don’t really see that with the platinum market and Palladium. You have to watch…

08:38
different news flows that are hard to see, like is there a disruption in Russian production or South African production? You know, one of the things we’ll follow is like Eskom, which is a major power producer for the energy in South African mines. If they go through rolling blackouts or they have like a stage one or two or three where they’re curbing some of those, the power that’s flowing through the mines, production will naturally come off, prices will go higher. So the only issue that I have with platinum is that

09:07
it does like hit these air pockets where it’ll drop $20 out of nowhere. Like we just had a client who put on some palladium, the chart looks fantastic. And then you look a few minutes later, the thing falls like 20, $30. It’s seemingly out of nowhere. So it is a difficult ride to ride. You do have to pay attention to the volatility, your account size, position, proper positioning and having proper risk management. Well, speaking of volatility, it’s been a while since we spoke. What are your thoughts? I mean, what do you advise clients when it comes to Bitcoin?

09:36
I mean, it’s on a run here, but what do you make of it? So the, the, the CMA did a fantastic job creating a Bitcoin contract. That’s one 10th of the size. So you’re going to get, um, prop, I think you can manage the risks properly. So every $10,000 move Bitcoin moves, it’s going to be a thousand dollar move for the client or every thousands, a hundred dollars. So they’ve really done a great job on creating a product. That’s the right.

10:01
size for the individuals. So we have made some leaps and bounds on Bitcoin, broke out through the 70,000 area. We got to 72,000. It looks like the party’s back on. I mean, the Bitcoin bros are back. They’re starting to buy Ethereum. They got the ETF. It looks like it could be down the pipeline that the Ethereum ETF that’s going to create kind of a one, two punch. And you’ll start to see all these different cryptocurrencies take back off again. Bitcoin brothers definitely back. I mean, one last thing we spoke.

10:31
Goal, we spoke silver. Let’s finish that trifecta with your thoughts on oil here. Are you surprised we’re not having bigger moves? Okay, yeah, so it seemed like some of the geopolitical tensions died down. It’s hard with the media because of the fact that I think the media creates a lot of emotions where you’re seeing these conflicts between like Iran and Israel, is World War III back, and then that story seems to be swept away. So it doesn’t get that same lingering bang that it had before.

11:00
The problem with oil right now, oil is at an elevated level. You are starting to see Saudi Arabia export more, but they’re producing less, which what that does is it means that Saudi Arabia is working more efficiently. They’re coming out and they’re selling off a lot of their excess inventories, which could create a tighter structure going forward. That’s why you’re seeing the front month crude oil, the July contract, at periods of time, will be down about a dollar.

11:27
where the back month, December and March, are only going to be down about 50 cents. I and my team have been bullish on crude oil for about the last year and a half, thinking that the economy is doing well, and that people are going to continue to drive and travel, and things like that. You do got to remember that like 6,000 everyday use products are made from different petroleum. So, crude oil is definitely here, the demand is here, and I think it’s going to stay at these elevated levels.

11:54
All right, well, we started talking gold. Let’s wrap with that because, you know, with the rally, obviously, Phil, we’re having huge new forecasts. If you want to even think 5,000 is big, you know, 10,000, 25,000. I mean, where do you think it could really go here? Ah, you know, the funny thing about like price targets is that like everyone comes up with a higher one and I have many of my clients where

12:18
If gold went to $5,000 an ounce tomorrow, I’d tell them, take the dough. And they’d go, no, Phil, it’s going to $10,000 an ounce. So, you know, it’s tough to say. I think realistically you come up with like $3,000. I think at the end of the year would be, could, could be achievable. If you get more interest rate cuts into the equation, if you get a downtick in CPI, you get the central bank buying geopolitical tensions remain elevated. I think all those things are there.

12:44
As far as drawing some lines in the sand, I think, you know, we start going below like 2250, there was a gap in the charts there. If we start going there, I think that it could be a precipitous decline back down to 2000, but under 2000, I think is a gift these days. All right. Phil Streible of Blue Line Futures, thank you so much for joining us. Thanks for having me. Thank you very much. We’ll see you soon, Phil.

13:10
And thank you all for watching. Be sure to stay tuned to the Daniela Cambone show to stay on top of all this awesome content and sign up at danielacambone.com. That’s it for me. We’ll see you soon.

13:23
you

SOURCES:
https://twitter.com/PStreible

https://www.google.com/finance/quote/GCW00:COMEX?sa=X&sqi=2&ved=2ahUKEwj40_21neWEAxUEHkQIHb1XC4kQ3ecFegQIDRAX&window=YTD

 

https://www.google.com/finance/quote/NYICDX:INDEXNYSEGIS?hl=en&window=YTD

 

https://www.google.com/finance/quote/SIW00:COMEX?sa=X&sqi=2&ved=2ahUKEwiOqeaD5qGGAxWGHUQIHfgIC5kQ3ecFegQIIBAX&window=YTD

 

https://www.google.com/finance/quote/HGW00:COMEX?sa=X&ved=2ahUKEwia7d_-5qGGAxVNEEQIHZdPAJgQ3ecFegQIGBAX&window=YTD

 

https://www.google.com/finance/quote/PAW00:NYMEX?window=YTD

 

https://www.google.com/finance/quote/CLW00:NYMEX?sa=X&ved=2ahUKEwiajcv86qGGAxWqMEQIHeKwB5oQ3ecFegQIHRAX&window=YTD

Sources & References In This Article

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