March 2024 - Week 2 Edition

Gold is Soaring This Election Year as History is Rhyming

Gold touched $2,200 briefly on the futures market on March 8 and gold has been rising to new record highs each day this month. The trend began with a $40 surge to $2,080 on March 1 and then rose each day last week, from $2,120 on Monday to $2,130 Tuesday, $2,150 mid-week, $2,160 Thursday and near $2,180 on Friday. On Monday, March 11, gold rose again, hitting $2,185 on the spot market and reaching an all-time closing high each day, so far in March. Silver is also strong, trading at $24.50 to begin the week.

The move in metals prices, particularly gold, appears to have caught economists and Wall Street analysts not paying attention and ignoring trends. Since 2008, central banks have been making huge gold purchases and then boosted those purchases even more after Russia invaded Ukraine. But central bank gold buying didn’t stop in 2022; it has continued, and since Hamas attacked Israel, killing thousands of innocent people on October 7, 2023, the price of gold has increased another 19 percent. India and China are both buying lots of gold, but so are Turkey and the U.K., according to the World Gold Council.

As America’s Gold Expert®, my gold price predictions were backed up with confirmation by financial guru Steve Forbes during our meeting in October. Now, major banks are also predicting gold will, at least, hit $2,300 this year. Analysts at Citigroup, J.P. Morgan, TD Securities, Forexlive and Goldman Sachs may be a little late getting to the party but they are all predicting a continued rise in gold. Whether you already have gold holdings, or not, now is the time to buy gold and add it to your investment portfolio. It’s easy, safe and can be done with a phone call, so call one of our expert account representatives today, before you miss this latest entry point in gold’s next rise.

Back when I was in high school, we were assigned the Mark Twain classic, Tom Sawyer. In my freshman year of college, I was also assigned to read Huckleberry Finn. Tom Sawyer was easy reading for everyone but Huck Finn was longer, so some of my classmates just read the $1 “Cliff Notes” or maybe just the Classics Illustrated comic book version. Those were great for getting the story flow but they missed Twain’s colorful writing style, so I read the original PLUS the Cliff Notes and got top marks. Our teacher could tell which students only read the Cliff Notes since they all missed the same questions about specific quotations within that classic book.

My point is that “shortcuts are not the way to go.” When studying history, particularly coin history and the history of gold, I’ve learned the value of a famous quote often attributed to Mark Twain, “History doesn’t repeat itself, but it often rhymes.” Last October, I interviewed Steve Forbes (see November 2023, Week 4) and he said gold would, “ start the new year over $2,000 and could well reach $2,400 in 2024, or soon thereafter,” especially if the economy doesn’t improve. Upon continued questioning, he said gold could make it to $2,500 if “the good side” doesn’t win the 2024 elections. When he said that, gold was $1,920 an ounce, so with gold now at $2,185 we’re about halfway to $2,400 in about four months. I’d say we’re right on track.

As Forbes told me in his interview, “Mike, tell your customers to put some money in gold throughout this coming year. Gold is life insurance for the rest of your portfolio.” As we saw last week, even after Biden’s energetic yet divisive State of the Union address on Thursday, gold kept going up.

In the last election cycle between these same two aging men, gold rose about 25% and silver almost twice that. We can’t promise similar gains this year but I am predicting history is likely to “rhyme.” In 2020, there was COVID-19 and low interest rates. This year, we have the promise of a coming decline in rates, which should help gold, primarily because the dollar is likely to decline when foreign investors don’t get juicy returns from their dollars, and our soaring deficits cause investors to turn away from investing in U.S. Treasury bonds.

Despite President Biden’s bogus claim of reducing deficits, which I will detail shortly, the U.S. Department of Treasury reports that red ink is growing at the rate of $10 billion per DAY – or about $7 million per minute, with the national debt at $34.4 trillion – up $10 trillion in the last four years and rising way too fast. In late 2023, Moody’s reduced its credit rating for U.S. debt to “negative” since “building political consensus around a comprehensive, credible multi-year plan to arrest and reverse widening fiscal deficits through measures that would increase government revenue or reform entitlement spending appears extremely difficult.”

Global tensions are far higher now than in 2020. In addition to the two-year-old conflict in Ukraine, the cease-fire talks between Israel and Hamas broke off last week, after Yemen’s Iran-backed Houthi rebels launched drone attacks targeting the U.S. Navy and Royal Navy peace-keeping ships in the area. Gold is up $300 since Hamas invaded Israel – right before my interview with Steve Forbes in mid-October 2023. 

Even though gold ETF demand was down in 2023, we’re seeing huge annual demand growth in the over-the-counter (OTC) market for gold, rising 753% last year, according to World Gold Council annual demand data. Previous peaks were in election years, 2016 and 2020, so history is rhyming once again.

Biden’s Blunders in the State of the Union Speech

Last week, I asked my friend and economic historian Gary Alexander to listen to the State of the Union (SOTU) speech and catch any “Pinocchio” moments. He had a long list but I asked him to stick to just two:

Here they are:

#1: “Four years ago next week, before I came to office, our country was hit by the worst pandemic and worst economic crisis in a century … I inherited an economy on the brink.” – President Biden’s SOTU speech

It seems to me that the Great Depression happened within the past century (1929-41) but, putting that “worst economic crisis in a century” aside, the third and fourth quarters of 2020 showed a strong recovery. Then President Donald Trump’s final two quarters produced a 33% bounce-back third-quarter growth rate and then a more realistic +4.1% GDP growth rate in the fourth quarter. That was followed by a robust +6.5% first quarter of 2021, with a low 1.4% inflation rate. That’s hardly inheriting an “economy on the brink” but in his first full month in office, Biden passed a hugely inflationary “stimulus” bill in February 2021, which even his Democratic economist ally, Lawrence Summers, rightly said would “set off inflationary forces we haven’t seen in a generation.” This caused high inflation and, by extension, a punitive rise in interest rates, which still haunt us.

#2: “I’ve already cut the federal deficit by over one trillion dollars.” – President Biden’s SOTU

This isn’t just a little bit false. It’s a whopper. Even the Biden-friendly Washington Post gave this line a “bottomless Pinocchio” for its audacious bending of the facts. The good news is that his fibs are now subject to “shrinkflation.” For the last two years, he has been saying he cut the deficit by $1.7 trillion but that isn’t accurate.

Metals Market Report Archive >