Veteran investors Rick Rule and Brien Lundin predict a surge in gold prices due to the US's staggering debt burden and the Federal Reserve's limited ability to raise interest rates. They both believe this creates a unique opportunity for investors to make significant gains in the coming years.
Veteran investor Rick Rule of Rule Investment Media told delegates at the Metals Investor Forum in Vancouver, Canada, that investors have no excuse not to make a million dollars in the coming years. Rule highlighted the combination of a positive outlook for metals prices and company valuations currently in the doldrums as the driving force behind this prediction.
Gold stocks, he noted, are relatively cheap compared to the price of gold, and their attractiveness increases as the gold price rises. Rule explained that the mathematics surrounding US debt, interest rates, and inflation paint a bright future for gold investors. According to a BofA estimate, the interest payments on US government debt, which stands at US$36 trillion, add US$1 trillion worth of debt to its total balance every 100 days. Off-US government balance sheet liabilities exceed US$100 trillion. This massive debt burden, Rule argued, will significantly erode the purchasing power of the US dollar, diminishing the value of people's savings.JP Morgan Chase reported that gold's share of the investment market in the US is currently just 0.5%. Rule pointed out that if we see a reversion to the mean, gold demand could quadruple to about 2%. The potential impact on gold's price in such a scenario would be substantial. Brien Lundin, editor of The Gold Letter, echoed Rule's sentiments, stating that the level of US debt prevents the Federal Reserve from raising interest rates as aggressively as it might desire. Lundin emphasized that US debt is currently 122.8% of GDP, making it impossible for the Fed to raise rates above the rate of inflation without triggering a collapse. He likened this situation to a 'brick wall' blocking the Fed's actions. Lundin also highlighted the impending refinancing of approximately US$9.5 trillion in debt due in 2025, predicting that this will become increasingly problematic this year. He characterized this as a 'generational opportunity' for investors, with 2025 starting off promisingly. Lundin further stated that technical analysis suggests gold has a good chance of challenging previous highs and breaking through resistance at US$2,800 per ounce. However, he cautioned that the recent surge in open interest on Comex indicates a volatile and potentially speculative market environment
Finance Commodities US Economy Gold Investing US Debt Inflation Interest Rates Federal Reserve Rick Rule Brien Lundin Metals Investor Forum
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Manchester City Faces Potentially Massive Points Deduction in Financial Rule Breach CaseKieran Maguire, a finance expert, states that while Manchester City won't face direct relegation from the Premier League even if found guilty of the most serious financial rule breaches, a significant points deduction could lead to their relegation. The club's case is currently under review by an independent tribunal.
Read more »
Housing association’s debt advisors help customers clear £3m of debtCustomers of The Wrekin Housing Group have been supported to clear more than £3 million of debt thanks to the work of its in-house debt advice team.
Read more »
Lundin Mining Reports Record Output and Transformative Year in 2024Lundin Mining achieved record production levels for copper and zinc in 2024, while also completing several strategic transactions that position the company for future growth. The company also provided updated guidance for 2025 and beyond.
Read more »
China Sees Surge in HMPV Pneumonia Cases, Linked to Covid Immunity DebtA recent rise in HMPV pneumonia cases in China has sparked concerns about the impact of Covid-19 lockdowns on population immunity. Scientists suggest that the reduced social mixing during the pandemic led to a decrease in exposure to various pathogens, resulting in a higher susceptibility to infections as social interactions resumed. This phenomenon, known as immunity debt, may explain the surge in cases of HMPV and other respiratory illnesses.
Read more »
Rory McIlroy pockets massive prize money after late Dubai Desert Classic surgeRory McIlroy produced a brilliant final round but had to settle for a share of fourth
Read more »
Get 58% off price of Echo Pop speaker in Amazon's massive saleThe speaker is described as 'small but mighty' and can be used with Alexa
Read more »