(***** News) - Gold continues to trade in a wide range, stuck between resistance at $2,400 and support at $2,300 an ounce. While risks remain to the downside as the Federal Reserve’s aggressive monetary policy keeps investors away, one market analyst continues to look at the broader landscape.
In an interview with ***** News in mid-June, David Brady, an independent analyst and the author of The FIPEST Report on Substack, said that lower gold and silver prices through the summer will create strategic buying opportunities for what he expects will be a much longer bull run.
Looking at the technical price action, Brady said he sees gold prices bottoming between $2,280 and $2,250 an ounce. He added that in the broader landscape, this consolidation period is a short-term shallow correction in a broader uptrend.
However, instead of trying to catch the bottom, Brady said that investors should find a price level they are comfortable with and ride out the current volatility.
“I’m looking to $2,700 to $3,000 before we get a major correction on this rally,” he said. “We are talking about a correction of pennies when you look at the potential gains. The risk-reward profile is in your favor, but the key is you have to remain patient and let this all play out.”
Brady added that $3,000 is only a mid-rally target, which triggers a much steeper correction; long term, he said he sees prices going to $5,000 and potentially even $10,000 an ounce.
“This is the start of a bubble in precious metals,” he said. “This is going to go on for a decade or two, or maybe more because confidence in fiat money is disappearing.”
In a world that is drowning in debt, Brady said that gold and silver remain the only solid store of value. Currently, the U.S. debt is $34 trillion, and many economists, including Federal Reserve Chair Jerome Powell, have said that it is on an unsustainable path higher.
Two weeks ago, the International Monetary Fund said that U.S. government debt poses a growing risk to the global economy. Brady pointed out that this growing crisis is eroding trust in the U.S. dollar as countries start trading in other currencies.
He noted that Saudi Arabia stopped quoting oil prices exclusively in U.S. dollars. While China has been making headlines in the last year and a half with its gold-purchasing program, Brady said that this trend started much earlier.
He pointed out that a decade ago, Germany was one of the first major central banks to repatriate some of its gold from London and New York. Since then, several other countries have followed suit. In this environment, he said that gold is the anti-dollar, which is why nations are buying it and keeping it close.
“Even if you don’t want to listen to me, you should follow the smart money, and central banks right now are the smart money. They’re not doing this for fun. They don’t like shiny rocks,” he said. “They see gold as a long-term investment. They are preparing for something. They are preparing for some sort of calamity.”
