A gold boom appears to be imminent. Some very interesting comments from the World Bank today. After a couple of years of playing down inflation and constant rhetoric that Inflation during covid was just a short-term issue, compounded by Covid stimulus, they now seem to be admitting defeat.
"The Bank said its global economic prospects (GEP) report was the first systematic attempt to compare the current state of the world economy with those during the stagflation of the 1970s. It said the slowdown in growth between 2021 and 2024 was on course to be twice that of the period between 1976 and 1979, adding that recovery from the high inflation that followed the oil shocks of the mid and late 1970s required steep increases in interest rates in the west. These played a prominent role in triggering a string of financial crises in emerging market and developing economies."
“Amid the war in Ukraine, surging inflation, and rising interest rates, global economic growth is expected to slump in 2022. Several years of above-average inflation and below-average growth are now likely, with potentially destabilising consequences for low- and middle-income economies. It’s a phenomenon – stagflation – that the world has not seen since the 1970s.”
Full article here: Return to the 70s: World Bank warns of weak growth and high inflation (msn.com)
So what happened to the gold price during this period 1976-1979???
Gold rose from $120usd to $640usd. Approximately a 530% increase.
There are different factors at play in today's modern world, such as Crypto investing. Potentially this may affect such a massive move and take some liquidity away, however the fact that the current issues are expected to be twice as bad as in the 1970s tells me that there is a massive boom ahead for gold price regardless. At minimum during the next 3 years, gold will double IMO. We are looking at $4000usd gold in the next few years in that case and it is likely to be much more! Especially if crypto fails to fire - many are expecting it to lose its safe-haven shine and instead the market will turn to traditional safe havens. Australian gold prices are already had solid levels thanks to the US dollar differential. However, once gold in USD gets going, Aussie gold prices can only move higher IMO. Get set for the mother of all gold booms in the weeks ahead IMO. Right now we are seeing the big end of town cap gold around $1800usd levels. Once they have their fix, it will run big time. A great time to be accumulating ASX gold stocks, especially with bargains to be had around tax sell time. Good luck everyone, it has required a lot of patience but the time has almost come!
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