When will gold reach $3,000?
An unexpected question that no one has yet asked. A year ago, talk of gold rising to $2,500 seemed abstract. Investors were interested in whether gold would be cheaper or slightly more expensive than $2,000.
In 2024, things have changed dramatically. The powerful trend is not even thinking of stopping. The reasons are well known. We wrote about them in our blog before the turn of the year. Nothing has changed since then.
But there is another reason that has boosted demand for gold. It has to do with the fact that Western countries have almost agreed to confiscate frozen Russian assets. Or some of those assets.
Why does this matter for the gold market? According to surveys, about 2/3 of the world's central banks fear a similar freezing of their international assets. It is clear that these are mainly the central banks of Africa, Latin and South America and Asia.
How can these central banks reduce their exposure? Only by diversifying their assets. And these assets should not be denominated in US dollars, euros and currencies such as sterling, Australian dollars, etc.
What should the assets be invested in then? Certainly not into Third World currencies. In fact, for such a huge amount of money, there are only 2 ways: it's gold and cryptocurrencies.
Some central banks may have already bought BTCs for their balance sheets. But unlike the government of El Salvador, they are in no hurry to announce it publicly. There are many reasons for this and this is not the subject of our article.
But it is possible to buy gold in exchange for dollar-denominated assets, such as U.S. government bonds. And even declare it publicly.
If we see not talk, but real confiscation of frozen Russian assets, the demand for gold will grow even stronger. Exactly on the part of the central banks. And the price of $3,000 will no longer seem like something out of the realm of fantasy.
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