Page 24 - Bullion World Volume 4 Issue 5 May 2024
P. 24

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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