Market watchers have their sights set on the US$2,000 per ounce level and beyond after gold's brief move past US$1,970 this week.
Top Stories This Week: Gold Price Spikes, Then Falls; Can Silver Hit US$50 in 2022?youtu.be
The gold price spiked this week as the conflict between Russia and Ukraine boiled over.
After starting the five day period just below the US$1,900 per ounce level, the yellow metal leaped rapidly to about US$1,970 in the early hours of Thursday (February 24). The major move for gold came as Russia launched what Ukraine has called a "full-scale invasion," with investors rushing toward the safe-haven asset.
At the same time, global equity markets sank, including the S&P 500 (INDEXSP:.INX) and NASDAQ Composite (INDEXNASDAQ:.IXIC). Bitcoin also took a hit, prompting questions about its utility in times of crisis.
Although the clash between Russia and Ukraine has intensified, there's been some recovery in the markets, and gold had pulled back to around the US$1,890 level at the time of this recording on Friday (February 25) afternoon.
Gold's short-lived move has prompted market participants to set their sights set on the US$2,000 mark and beyond. I heard this week from Ronald-Peter Stoeferle of Incrementum and the "In Gold We Trust" report, who said he expects to see new all-time highs for the yellow metal this year.
He pointed out that gold isn't far from its previous top level, and said once it gets there it won't face resistance — in his opinion, gold could climb quickly to US$2,300 in that scenario.
"I think that the next stage of this bull market is just getting started. I see new all-time highs this year" — Ronald-Peter Stoeferle, Incrementum
That said, Ronald-Peter also reminded investors that geopolitical events tend to have a short-term impact on gold, not a long-term effect. While what's happening with Russia and Ukraine is important, he's also watching factors like central bank actions and is keeping a close eye on fiscal policy.
With those comments in mind, we asked our Twitter followers this week if they think gold will reach a new all-time high in 2022, and if so, when. By the time the poll closed, opinions were split fairly evenly between Q1 and later in the year — only about 20 percent of respondents said they don't think it will happen this year.
With a new record price potentially in store for gold, is silver set to tag along? I heard recently from David H. Smith of the Morgan Report, who is on record with a 2022 price call of US$50 per ounce for the white metal.
David acknowledged that silver's performance has been disappointing for investors, and said it will be crucial for it to get above US$25 or US$26. If it can do that, then silver could quickly move up US$5 or US$10 and continue on.
"This is the first time I've ever gone on record in print ... I'm willing to be wrong on this, but I do believe that this year silver has the potential to challenge US$50 — I don't know if it'll be successful or not, (but) I think it may" — David H. Smith, the Morgan Report
That's not to say the white metal's path will be straight up. David noted that volatility will continue for both silver and gold, and reminded investors how important it is to stand their ground. He believes we'll soon find out the real value of silver, but it will be all too easy to miss the boat.
"The value of silver — not you, or I or anyone on the face of the Earth knows the value of silver today, but we're going to find out before long" — David H. Smith, the Morgan Report
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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