Page 24 - Bullion World Volume 4 Issue 5 May 2024

Bullion World | Volume 4 | Issue 5 | May 2024

Ballooning US Debt is the Elephant in the

Room that will Support Gold Prices further

Dr Renisha Chainani, Head-Research, Augmont - Gold for All

Gold surged 18% between March 1 and April 12, rising
around $400 and hitting new all-time highs of $2448 on
escalating Middle East tensions, the Chinese gold rush,
record purchases by central banks, concerns over sticky
inflation, soaring U.S. government debt, and continued
fiat debasement.

Major institutions changed their estimates for the price
of gold upward after the rise. Goldman anticipates that
gold will reach $2700 by year's end, while UBS has
raised its year-end estimate to $2500/oz. Citigroup is
now predicting a $3000 gold price over the course of
six to eighteen months on this timeline. But then gold
corrected almost 6% to trade below $2300 in the last
week of April. This was a healthy correction in a long-
term bull market. The factors which supported the price
rally in March and April will continue for the rest of 2024
too.

One should pay close attention to the most important
factor of alarmingly high U.S. debt levels, which is
above $34.5 trillion by April 2024 and rising $1 Trillion
every 100 days. Concern about the rapidly rising U.S. Dr Renisha Chainani
government debt is also one of the main reasons for
elevated gold prices. The U.S. debt has crossed the $34
trillion mark in 2024, with interest payments projected
to reach $870 billion in 2024, underscoring the urgency
of fiscal management. In the US, debt is growing faster
than the economy and the Debt-to-GDP ratio is above
125.

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