Christmas in April?
That’s what colleague Chris Weber asked his readers this week.
But he doesn’t mean turkey and roast veg…
Unwrapping gifts…
Or watching It’s a Wonderful Life while trying to hide the fact from your family that tears are forming in your eyes at the end of the movie.
Even the way the movie’s name looks on the page – It’s a Wonderful Life – has a magical feeling. Marvelous.
[Editor’s Note: Your editor can’t deny it’s our favorite film. Hotdog!]
But nope, Chris doesn’t mean any of that. He’s talking about a prediction he expected for Christmas, which may arrive eight months early.
We’ll explain more below. First…
Market Data
The S&P 500 closed down 0.6% to end the day at 5,022.21… the NASDAQ lost 1.2% to close at 15,683.37.
In commodities, West Texas Intermediate crude oil trades at $82.76, down $2.52…
Gold is $2,388 per troy ounce, down $18 from yesterday…
And bitcoin is $61,256, down $1,456 since yesterday.
And now, back to our story…
Peak Gold!
We hope you subscribe to Chris Weber’s work in the Weber Report.
We’ve mentioned in these pages before that we’d heard about Chris for a few years… always people speaking highly of him… but perhaps due to laziness, we’d never bothered to check out his work.
That turns out to be the dumbest thing we’ve ever done.
Especially considering he has published his newsletter for something like 50 years. That should have given us a hint that it’s probably pretty good.
And it is.
Anyway, we mentioned recently that Chris predicted gold could hit $2,500 by the end of this year. (He also had a prediction for silver, with that reaching $187 over the next few years! Outrageous!! It’s only $28 today.)
But now Chris wonders if he wasn’t a little pessimistic about gold’s prospects this year. As he told his subscribers earlier this week:
It was only in the April 1 issue that the target of $2500 gold by Christmas was the headline. We don’t normally issue price targets, and you can see why. At the time, gold had touched a peak of $2,233. It had risen quite a bit to get there. In a normal market, a correction would be expected. But this is no normal market. Instead, it is a full-fledged bull market, as strong as any I have seen since I started watching gold in 1971.
This past Friday spot gold reached a peak of $2,430. I go by spot rather than futures, simply because no one knows what will happen in the future. But $2,430 is less than 3% away from $2,500.
As it happens, Chris isn’t the only analyst out there predicting a good year for gold. The head of commodities research for North America at Citi, Aakash Doshi, is even more bullish.
As Yahoo! Finance reports today:
Citigroup has forecast that gold prices could reach $3,000 per ounce over the next few months. The analyst behind the call, Citi North America Head of Commodities Research Aakash Doshi, joins Yahoo Finance to discuss his outlook.
Doshi states that the “big driver” behind his $3,000 per ounce target is the expectation that financial demand for gold will “catch up to what is strong physical” demand. He notes that demand has surged in the post-pandemic period, with central banks in emerging markets buying “record amounts of gold,” solidifying the strength in the “physical demand pool.”
It’s a rare occasion when the mainstream analyst is willing to make a bolder call than a newsletter writer.
We’re not sure what that tells us. Maybe we should just be happy that the mainstream is catching up to what Chris and others have been saying for years.
But maybe it’s also a reason to be cautiously optimistic. The long-term buy-and-hold gold investor probably won’t sell whether gold is $1,800 or $2,000 or $2,500 or $3,000 or more by the end of this year.
The trader, on the other hand, is likely to help push the gold price above where it probably should be… and will then help push it back down past where it should be.
In other words, our take would be this: We’ll back Chris’ prediction that gold could be around $2,500 by the end of this year… but knowing how speculation works, it wouldn’t surprise us if it was at that level, not on the rise, but on the down after reaching a much higher price before that.
Long-term – buy and own gold. Short term – look for some wild trading opportunities in the months ahead.
More Markets
Today’s top gaining ETFs…
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VanEck ChiNext ETF (CNXT) +2.5%
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Utilities Select Sector SPDR Fund (XLU) +2.1%
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U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU) +2.1%
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Vanguard Utilities Index Fund ETF Shares (VPU) +2.1%
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Fidelity MSCI Utilities Index ETF (FUTY) +2%
Today’s biggest losing ETFs…
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Siren Nasdaq NexGen Economy ETF (BLCN) -3.6%
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Invesco Semiconductors ETF (PSI) -3.3%
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VanEck Semiconductor ETF (SMH) -3.1%
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iShares Semiconductor ETF (SOXX) -3%
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First Trust Nasdaq Semiconductor ETF (FTXL) -2.6%
Cheers,
Kris Sayce
Editor, The Daily Cut