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May
22
2025
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$6,000 Gold Forecasts? The Experts Are Finally Catching Up
Your News to Know rounds up the most important stories about precious metals and the overall economy. This week, we’ll cover:
The latest gold price targets are spectacularly bullish Incrementum AG just published their annual and extremely detailed In Gold We Trust report, and as always, it's chock-full of data and forecasts that are worth your time. Fund manager Ronald-Peter Stoeferle says that $4,800 gold by the end of the decade is base scenario, with significantly more room on the upside. It's yet another in a line of suggestions that what we're seeing now is merely one leg of a gold bull market that might truly end up lasting a decade. Remember, things started heating up five years ago when the pandemic panic and subsequent lockdowns began. Then, 2023 was really just an extension of that, with the added driver of massive central bank gold buying in response to the hyper-weaponization of the dollar against Russia. Stoeferle says that gold has room to run for several decades, because of money-printing, geopolitical fragmentation and technical market factors. It is strange to hear about monetary excess during a time when the middle class is being eliminated, but it's a good reminder that the printers are always working. The middle and especially lower income classes might have less money than ever, but the rich are richer than ever, so we know where the printed money is going. Stoeferle says that there is an 80% likelihood the money supply expanding by 6.3% per year (on par with the 2000s). On the off chance you weren’t watching, gold rose some four-fold between 2000 and 2009, from about $280 to $1,100. Stoeferle leaves room for even more upside, with his gold price target doubling if the M2 money supply rises by 9.7% annually. But we can’t really trust the official money supply reports. Remember, the Federal Reserve changed their money supply measures when the multi-trillion-dollar Bidenomics stimulus plans were active. I expect we’ll see a lot more of this fudging in the next five years. The bureaucrat’s answer to an unfortunate data point is simply to change it… In other words, you can’t expect 9% annual money supply growth to make the headlines. Officials will try and do everything they can to lessen public awareness. Just as they have with their “improvements” to inflation measurements. The most important thing for gold investors, said Stoeferle, is to ignore price drops. Not to get anxious, to ride them out. He reminds us that temporary pullbacks of up to 40% have occurred across several bull markets in history. Smaller-scale, shorter-term price drops are commonplace. (No asset’s price ever goes up in a straight line, right?) Every time there’s even a small drop in gold’s price, we can expect to be bombarded with headlines telling us gold's run is exhausted, gold’s hit a price ceiling and so on. Those “Gold is dead” headlines, as always, are popular for a reason. When gold’s price goes up, it’s a signal of big economic challenges. Those very same economic challenges tend to drive the prices of nearly all other assets down. The “Gold is dead” headline is a service of the financial services community, each and every one of whom would be delighted to sell you any number of complex, opaque financial products guaranteed to go up with a lot of disclaimers and fine print… (Sorry about that – I’ll climb down off my soapbox now.) Back to gold price forecasts! Another highly interesting analysis came from JPMorgan, which presents us with a $6,000 target if just 0.5% of foreign-held U.S. assets are reallocated to gold. Now, JPMorgan calls this scenario hypothetical. I’m not so sure. We’ve seen a massive rotation out of U.S. assets since Liberation Day – in a trend that seems very likely intensify. (Unless, of course, the administration imposes capital controls on foreign investors? Because nothing drives horses to escape like locking the barn door…) We’ve noted a massive increase in gold acceptance among financial professionals over the last two years – who are finally catching on the diversification benefits of precious metals. Gold is becoming a necessary asset in modern wealth diversification (with even the most die-hard gold skeptics grudgingly advocating a double-digit allocation to gold). And many allocate much more, including central banks. Now, generally, we shouldn’t think of central banks as investors. They’re more like savers, focused on wealth preservation rather than growth. Right now, central banks collectively are choosing to buy gold at a record pace. Possibly because they’re among the largest owners of U.S. government debt? On May 15, Goldman Sachs made a much more conservative forecast of $3,700-$3,880 gold by the end of 2025. So however bullish you feel about gold, you are well within the status quo. London claims there's no pressure on speculators to have physical goldBritish gold company GoldCore recently went over the London bullion market announcement that an upcoming reclassification of physical gold bullion to “High Quality Liquid Asset” (HQLA) isn't happening. That seems to shut that story down, but in reality, only fuels the flames. For starters, as the article notes, gold has already been categorized as a “Tier 1” zero-risk asset, same as cash, since 1998. So why isn't it HQLA, as it fits the criteria fully? The article says the reasons are political, but we can think of other answers to that question. The HQLA category is more about liquidity, which means it’s also about supporting the existing system of unbacked, debt-based assets (including currency). Reclassifying gold as HQLA would give banks permission to diversify their holdings beyond sovereign debt – and that’s an outcome the world’s central banks can’t allow. For the reason, in order to keep currencies in demand, bank regulators must somehow ensure physical gold remains a “second-class citizen.” But how does that affect the Basel III guidelines? Turns out, it doesn’t. The Basel III regulations are still in play, and only physical gold meets Tier 1 asset requirements. It is highly likely, that both gold's price explosion since mid-2022 and the recent tightness in the gold market are related to Basel III. The article notes that central banks are continuing to buy massive quantities of physical gold because they know it's both a Tier 1 asset and highly liquid. Over 1,000 tons of gold bullion annually have been disappearing into central bank vaults since 2022. The big lesson here? No matter what bank regulators or market associations say about physical gold bullion, regardless of the marketing, only gold bullion is the world’s universal, safe-haven store-of-value asset. Wiser heads will ignore what bankers say – and watch what they do instead. Kyrgyzstan's gold-backed stablecoin is telling us something about currencies The central Asian nation of Kyrgyzstan is launching a gold-backed stablecoin this year. The most notable thing about this is that, for some reason, this stablecoin appeared out of nowhere and has taken precedence over the country's planned central bank digital currency (CBDC). Kyrgyzstan's digital som was already developed last year, but has not been heard of much since. Apparently, development of the stablecoin only started a few months ago, but it will be fully operational soon. This tells us a few things that we should all be paying attention to, even if we don't have relatives in Kyrgyzstan. For starters, it's clear that the country wants a currency that offers real value. The intention is to make remittances (payments sent from overseas) inexpensive and fast. These remittances from nearly 1 million citizens working in Russia and sending money back home to their families form a major part of the nation's economy. Kyrgyzstan is currently in a development trap. The less developed a nation is, the more vulnerable it is to inflation. So their currency, the som, has suffered plenty over the last couple of years. So much so it seems that both citizens (and maybe the government) have given up on it. The Kyrgyz government generally is considered corrupt which makes matters even worse. That makes me wonder – could this be another Zimbabwe, where the digital gold experiment implodes immediately after issue? Because the government is incoherent, incompetent or downright malicious? Well, time will tell. The story also reminds us that the European Union is, these days, the only bloc in favor of central bank digital currencies. Which makes sense given its rather anti-freedom stance. You probably noticed that CBDCs have fallen out of favor. That's because the U.S. has rejected the concept (at both state and federal levels) while the Federal Reserve has denied and disclaimed their own CDBC development efforts. This happened because of near-universal outrage. Even bureaucrats normallyunconcerned with the wellbeing of citizens took notice of the widespread rejection of a “digital dollar.” (I’d like to think Steve Bannon’s End of the Dollar Empire volume on CDBCs played a part, however small.) However, the concept might be down but it’s not out. We’re always just one crisis away from world governments jumping on any excuse to pivot right back to CBDCs. Remember, they claimed China's digital yuan as their inspiration in the first place! So we don't imagine this struggle for control of our economic freedom is over. As was always the case, physical gold and silver will remain one of the few safe havens from the loss of control, privacy and freedom that CDBCs offer.
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