Gold stalls just below the $1900 level
Guggenheim’s Minerd says $5,000 to $10,000 gold possible in future ‘exponential phase’

(USAGOLD – 5/27/2021) – Gold stalled just below the $1900 level in a muted response to this morning’s less than inspiring jobs report. It is level at $1898. Silver is up 1¢ at $27.78. That said, gold and silver are both up almost 7.5% thus far in the month of May. Guggenheim Partner’s Scott Minerd, a widely followed market analyst and long-time advocate of gold and silver ownership, has gone from bullish to very bullish on the metals. “As money leaves crypto,” he said in a CNBC interview yesterday, “and people are looking for inflation hedges, gold and silver will be much better places to go. It will take a while to build momentum in gold because the size of the market is so much bigger.” He sees the yellow metal possibly moving to an “exponential phase” during which $5,000 to $10,000 per ounce could be “ultimately in the cards.” As for silver, he sees it as a “high-beta version of gold,” predicting it will outperform its kindred precious metal.

Chart of the Day

Gold and the U.S. national debt
(1971 to Q1-2021)

area chart showing gold and the national debt growth 1971 to Q1-2021

Sources: St. Louis Federal Reserve [FRED], U.S Department of the Treasury, ICE Benchmark Administration

Chart note: This week, we are featuring classic gold charts for our newcomers – a quick look, basic rationale for gold ownership.  Five in all, they answer the questions: “Why gold? Why now?” In this fourth chart in the series, we show how since the early 1970s, the logic for gold ownership has been inextricably bound to the cash flow problems of the federal government. As the national debt increased, so did the well-documented damage associated with it – to the dollar, financial markets, and the economy in general. Simultaneously, gold’s role as an inversely correlated portfolio hedge grew, as you can see from the chart above. Few correlations in the financial markets ring truer and more consistently than the one between the federal debt and gold. As for the future, we should keep in mind that the very same conditions which created the long-term secular trend for both the national debt and gold are still in place today.

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