$500 Move in GOLD! Your Gold & Silver Investment Is About to Become Very 'Priceless' - Tavi Costa

$500 Move in GOLD! Your Gold & Silver Investment Is About to Become Very "Priceless" - Tavi Costa

The global financial landscape has witnessed significant shifts recently, particularly in gold markets and fiscal policies. Tavi Costa, a Member and Macro Strategist at Crescat Capital since 2013, has been closely monitoring these trends, offering insights into their potential long-term implications.
The World Gold Council's recent report highlights a complex picture of gold demand in Q2. While overall demand, including over-the-counter investments, reached a record high of 1,258 tonnes - the highest Q2 figure since 2000 - traditional sectors showed mixed performance. Jewelry consumption, for instance, fell by 19% year-over-year to a four-year low of 391 tonnes, mainly due to record gold prices.
Notably, central banks have been steadily increasing their gold reserves. Net purchases rose 6% compared to the previous year, reaching 184 tonnes in Q2. This trend aligns with Costa's observations on the growing importance of gold in central bank portfolios, driven by the need for asset protection and diversification in an increasingly uncertain economic environment.
Meanwhile, the United States faces mounting fiscal challenges. The Congressional Budget Office projects a federal budget deficit of 1.9 trillion dollars for the current year. This widening deficit is partly attributed to rising interest rates, which have increased the cost of servicing the national debt. Additionally, mandatory spending programs like Social Security and Medicare are putting further strain on the budget as America's population ages.
Costa warns of a potentially unsustainable trajectory for US interest payments. He projects these payments could reach 4.6% of GDP by 2025, posing significant economic risks. The situation is further complicated because 27% of US debt is due for refinancing within the next 12 months, likely at higher interest rates than the existing debt.
As gold prices continue their impressive rally in 2023, climbing over 17% year-to-date, the precious metal's performance is reigniting discussions about the mining industry's potential. This surge, primarily attributed to expectations of a weakening dollar as interest rates are anticipated to fall, has caught the attention of investors seeking new opportunities.
The NYSE Arca Gold Miners Index, a key benchmark for the industry, has mirrored gold's performance with a 16% increase this year. However, despite this parallel growth, Tavi Costa, a respected macro strategist, expresses surprise at the persistent skepticism surrounding the metals and mining sector.
Costa argues that this skepticism is historically unsupported and fails to recognize the industry's significant growth potential. He contends that current market sentiment may overlook valuable opportunities, particularly in mining companies that could substantially benefit from higher gold prices.
However, the industry's response to rising gold prices remains measured. Victor Gobitz, the chief executive of Buenaventura, Peru's largest precious metals miner, offers a more conservative outlook. Speaking to Reuters, Gobitz suggested that gold prices would need to reach at least 1,350 dollars per ounce to trigger new mining projects across the industry.

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[Gzvzusba]

*I KNOW NOTHING ABOUT TRADING/ INVESTING AND I'M KEEN ON GETTING STARTED . WHAT ARE SOME STRATEGIES TO GET STARTED WITH ?*

[georgeyao]

Should have stacked in 2022 and 2023. A little late.