Gold surged to a new record high of $2135 early Sunday morning before pulling back sharply Monday. In this video, Peter Schiff explains why this is a buying opportunity.
After setting the record, gold quickly sold off and consolidated, dropping over $100 back to around $2,020. Some people see the quick selloff as a bearish sign. Peter said he doesn’t think so.
Now, a lot of people are taking this to mean that that’s it. This is some kind of blowoff top. This is the end of the gold bull market. I think this is just the beginning.”
Peter said he thinks the fact that we made an all-time high indicates a new bull market, not an old bull market that’s dying.
We’ve seen the price of gold gradually building tremendous support over the last several months despite relentless Fed rate hikes and tough talk from central bankers claiming they will do whatever it takes to beat price inflation.
Gold has held pretty firm despite what the markets perceive as very strong headwinds with a strengthening dollar and rising yields that are normally perceived as a big negative for gold.”
Throughout the year, gold has faced stiff resistance at $2,000 an ounce, but held firm support at $1,900.
Peter said he thinks many short-term investors took advantage of the big gap up in the price of gold on Monday and wanted to pocket those profits. But he thinks $2,000 has now become a strong level of support.
Does that mean there’s some kind of line in the sand where gold can’t go below $2,000? No. But I think there will be tremendous buying at any opportunity to buy it below $2,000. Because the way markets typically work, what was resistance becomes support when that resistance is taken out.”
So is it too late to buy gold?
Peter said he doesn’t think so. In fact, it’s still early. Gold is still cheap when you take into account price inflation. It’s also underpriced compared to many other assets, including the stock market. In the early 80s when gold ran up from $35 to more than $800, the stock market dropped from 1,000 to 800. Stocks fell far more in gold terms than they did in dollar terms.
People who had the foresight to load up on gold in the late 1960s, early 1970s because they understood the consequences of the huge deficits and the inflation that was being created in the 1960s and early 1970s — they made a tremendous amount of money. The people who didn’t recognize that, who were stuck in the mindset of the ‘nifty-fifty’ stock market – the go-go 60s – they got destroyed during the 1970s. So, I think we’re set up similar to the way we were in the 1970s, only the United States is in much worse shape now than it was then.”
We are careening toward a fiscal crisis unlike we have ever experienced. And I think Powell is going to run up the printing presses like we haven’t seen before – even more than Bernanke in the original QE days in the aftermath of the 2008 financial crisis.”
Wall Street is convinced that the inflation war is over and the Federal Reserve is on the verge of rate cuts as early as Q1 or Q2 2024.
If gold couldn’t go much below $2,000 when the Fed was hiking rates, imagine where it can go now that it’s stopped hiking and is about to cut — especially when the markets come to terms with the reality that inflation is not dead.”
Peter said he thinks the Fed will respond to this looming financial crisis in the same way it responded to the 2008 crisis, the dot-com crisis, and every crisis since.
By printing money, creating inflation. The bottom is going to drop out of the dollar. Inflation is going through the roof. And gold is going to be leading the way. So, now is really the time, now that we’ve taken out this resistance, if you haven’t already bought your gold, buy some.”
And Peter said silver is an even better buy. Its price is still half its record.
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