Once upon a time, not too long ago, the U.S. dollar remained strong and was regarded a safe-haven currency because, in part, America was perceived as having the world’s strongest economy.
However, now with the Federal Reserve and Washington pumping in countless trillions of digital dollars printed on nothing and back by nothing, the dollar has fallen 7.5 percent from its mid-March high.
Despite the dollar bouncing back a bit today – gold hit a new high and silver prices keep rising.
As with many commodities, the precious metals are priced in dollars, so they become cheaper for foreign investors when the dollar softens.
But, it’s more than that. Yes, it’s cheaper for foreign investors, but across the globe, central banks and governments are doing the same as the U.S.: flooding their countries with cheap money and in turn devaluing their currency… and precious metal buyers know it!
Also, while many analysts are bracing for inflation to gain strength, thus pushing gold prices yet higher, we disagree.
Yes, we are forecasting much higher gold prices, but not because of traditional inflation. We are forecasting, “Dragflation: economies, prices of products, and currencies will decline.”
Thus, it will cost more to buy products not because they increased in price – indeed, we expect supply to overwhelm demand – but because it will take more cheap money to buy them.
As we accurately have forecast, gold and silver will continue to rise in value as governments and central banks continue to flood the world with cheap money that becomes worth even less as more pours in. The cheaper money gets, the less it is worth, and metals will float above the ocean of worthless digits.
TREND FORECAST: In June, when silver was trading in the $17 an ounce range, we forecast it was ready to break out, and, when it did, it would accelerate at a faster rate than gold. Silver is up over 30 percent since that time.
We maintain our forecast that when gold strongly breaks above $2,000 per ounce, silver will spike much higher, doubling in price to $40 per ounce… and higher.
In fact, on 18 June 2020, Gerald Celente was a keynote speaker for the Elementum International AG conference, where he precisely forecast the Silver Bull Run. Since then, silver’s price has done nothing but rise, reaching a six-year high.
In addition to it being bought for its monetary value, silver, which outshines copper as the best conductor of electricity, is also a key element in electronics, photovoltaic panels, cell phones, keyboards, etc. Therefore, with these sectors accounting for more than half of silver’s market and world governments committing more than $50 billion worth of “green” initiatives, most in renewable energy, they are polishing silver’s future.
Moreover, unlike gold, there are no silver stockpiles.
As prices have risen, holdings of bulk silver traded on exchanges have grown 35 percent this year to about 820 million ounces worth about $17 billion. Share prices of silver mining company Fresnillo are up 70 percent this year; Hochschild, another silver producer, has seen its stock price gain 40 percent in recent months.
Silver’s price has risen 70 percent since its March low, compared to gold’s 24-percent gain.
The spread between silver and gold prices peaked at 125 percent in March. It has eased since then, but remains well above its average of 66, making it likely that the metal’s price can climb higher.
The Oil Front
Oil prices remain relatively steady but are unlikely to settle above $50 this year. Most producing regions, including U.S. oil shale plays, need prices higher than that to turn a profit. As we have forecast in our Geopolitical section, with tensions heating up in the Middle East, should major military conflict erupt between Egypt and Turkey and/or the U.S. and Israel vs. Iran, oil prices will sharply spike.
Should that occur, the already declining world economy will crash further into the “Greatest Depression.”