Cyrille Jubert, a precious metals analyst, said that gold and silver have broken through key monthly resistance levels, and the Shanghai gold premium has reached 1.9%. Since 2009, most central banks, except for the Federal Reserve, have been accumulating as much gold as possible because they know that gold will play a role in the future monetary system. He predicts that gold prices will reach $3170 by 2025 and emphasizes that the purchasing power of the US dollar will significantly decrease.
Looking back on December 1st, which was last Friday, those traders who logically "shorted" at this resistance level bought back their positions, causing gold prices to climb to $2071, a historic high hit three times in gold trading over the past three years. But before that, gold and silver had successfully defended this. Logically speaking, all speculators bought "short" positions at this level before last week's close on Wall Street.
Indeed, gold has reached a new historical high among all currencies.
Afterwards, Cyrille explained that JPMorgan Chase resumed work and sold paper gold, bringing Wall Street prices down to last Friday's closing level. According to all the chart logic, they should even bring it back to $1995, the old monthly resistance level, which is what the market calls a pullback. This will allow traders to check whether the old resistance has become "support", and if so, the price should rebound and return to a high point, and be tested again.
Since 2009, most central banks, except for the Federal Reserve, have been accumulating as much gold as possible because they know that gold will play a role in the future monetary system. In order to purchase gold, central banks of various countries sell the US dollar and US Treasury bills, which are the core of their monetary reserves, as oil must be purchased in this currency. But this is no longer the case, so the market value of US treasury bond bonds plummeted. Especially because the US government is increasing its debt at an unprecedented rate in history, and no one is buying it anymore.
According to The Economist, the outlook for gold is bright, while the US dollar will also lose purchasing power in 2024.
Cyrille pointed out that it is interesting to observe what happened after the monthly resistance level of gold was broken through from 2014 to 2019. The price of gold rose from $1354 to $2072 within 15 months. The same increase will cause gold prices to reach $3170 in January or February 2025, significantly reducing the purchasing power of the US dollar.
Taking advantage of the loss of control in gold prices, silver prices broke through the diagonal resistance level that has been hindered since their high point in 2011 at the end of the month.
"Please note that industrial demand, especially photovoltaic demand, is expected to grow sharply in 2023, while official silver inventories of COMEX, LBMA, SLV, and Shanghai are rapidly decreasing. Although inventories have been replenished multiple times this year, Shanghai's inventory is still at its lowest level since 2016, and China is the world's third-largest silver producer," Cyrille continued to add.
He mentioned that the official inventory of iShares Silver Trust (SLV) is mainly used to intervene in silver prices in New York and London.
"For those who invest their funds in precious metals to protect themselves from the impact of new banking crises and currency depreciation, 2024 should be a very satisfactory year," he concluded.
