Several events are likely to trigger a significant increase in precious metals prices in the near future.
As I have already pointed out in previous articles, the monetary policy of the US Federal Reserve (Fed), to be announced on the evening of May 1, will trigger a historic bullish rally in gold, oil and, above all, silver. This rally should continue throughout May, June and July, before probably pausing until the end of October.
What do we know?
At the beginning of 2024, the M2 money supply stood at $20.92 trillion. Over the course of 2024, nearly $10 trillion in Treasury bonds will mature, representing almost 30% of the U.S. debt. The US government is recording a quarterly deficit of $1 trillion. Consequently, by the end of 2024, the Fed will need to create nearly $13 trillion, increasing the money supply to new historical levels.
From a mathematical point of view, the value of the dollar expressed in ounces of gold will fall sharply, and the currency's purchasing power will collapse. This will be reflected in the price of a barrel of oil, but more generally in the price of most commodities. This was one of The Economist's expectations, expressed on the November 16, 2023’s cover.
It is highly likely that in the last few days of April, just before the Fed's speech on May 1, we will see a consolidation in oil prices, with a possible return to the 200-week moving average, before a powerful upward turn in early May. Geopolitical events might seem to justify this rise in prices, but the real main cause will be monetary.
We will likely see a parallel movement in gold, which could pull back on the former resistance, while taking support from the 50-weeks Moving Average, before a violent bullish rally in May, June and July:
Silver, which is currently lagging behind gold, is also likely to make a pull-back, either to former resistances or even to the 200-week moving average. This movement should be very sharp before the start of an exceptional rally that will propel the price to its all-time highs:
What applies to the price of precious metals in dollars will also be true for other fiat currencies. In fact, over the next three months, you're going to see the first leg of devaluation in all the major currencies. This devaluation should be followed by a three-month pause, before a resumption of the rise in precious metals in late October or early November, which should be just as powerful.
If you heat your home with oil, I strongly advise you to fill your tank before the end of april.
If you use bottled gas, buy before the expected price increase.
If you have cash on hand, consider investing in silver rather than gold, as the gold/silver ratio is set to change dramatically over the next 12 months.
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The information contained in this article is for information purposes only and does not constitute investment advice or a recommendation to buy or sell.
