Huge Gold News From Central Banks! Your Gold & Silver Are About to Become Priceless - Gareth Soloway

"Gold appeals to central-bank reserve managers as a safe haven in periods of economic, financial, and geopolitical volatility." says a research paper co-written by monetary historian Barry Eichengreen in 2023 and published by the IMF
So far this year, gold has surged by about 22%, surpassing 2,500 dollars an ounce, driven by geopolitical uncertainty and expectations of a potential Federal Reserve interest rate cut. In comparison, the S&P 500 has risen by around 18.5% during the same period.
Renowned financial analyst Gareth Soloway notes that the dollar's weakness has been crucial in recent market shifts, with gold outperforming the S&P 500 despite Bitcoin's lead. He emphasizes that central banks' gold purchases signal the asset's strong future potential. Demand for gold from central banks has been elevated in the last two years as some countries diversify their foreign currency reserves. Their demand contributed to the gold price rally in March-May, with the spot price hitting a record high of $2,449.89 per ounce on May 20.
From a technical perspective, Soloway predicts that rising US government debt will worsen in a recession, prompting more government spending and easier Fed policies to boost gold. US total public debt has increased every year except 2000, when it decreased by almost 2%. Market observers say concern about the rapidly rising US government debt is partly behind recent gold prices and bitcoin surges, even as the Treasury market remains relatively optimistic about the country's fiscal path.
By analyzing the logarithmic chart, Soloway shares his next upside target for gold, which is around 2700 dollars, connecting the highs from 1979 to 2011.
Regarding the Fed's actions, Gareth Soloway underscores that markets often decline when rate cuts begin, signaling the Fed is behind the curve. He predicts more cuts but warns that the Fed's dovish stance may reflect troubling economic data. Soloway advises caution, as significant cuts could indicate more profound issues. Traders have fully priced in a Fed easing for next month, with a 70% chance of a 25-basis-point cut and about 30% chance of a bigger 50-bp reduction, according to the CME FedWatch tool.
Gold prices rose on Tuesday, driven by a weaker dollar. Investors are awaiting inflation data that might provide insights on the scale of the Federal Reserve's expected interest rate cut next month.
Despite rate cuts in 2008, the market plunged. Soloway anticipates that aggressive Fed rate cuts will likely signal serious economic trouble, potentially leading to a major recession and significantly lower earnings due to struggling consumers.

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