According to Jared Dillian, author of the book ‘No Worries’, commodities are known to peak following major geopolitical events. But the market has the highest probability of meltdown since the 1980s. Therefore, we should not ignore a 10% movement in the gold price in any direction.
Giant banks increased their gold price forecasts
Gold increased by 18% between March 1 and April 12, reaching around $400. The escalating tension in the Middle East and record purchases by central banks were effective in this rise. Following the rally, major banks revised their gold price outlooks upwards. cryptokoin.com As we reported, Citigroup predicts a gold price of $3,000 in six to 18 months. Goldman, on the other hand, expects gold to reach $2,700 by the end of the year. The most modest forecaster, UBS, has a year-end target of $2,500.
Jared Dillian: You will see a pullback in gold!
At the time of this writing, spot gold has fallen from record levels. However, it managed to stay above $2,330. Dillian predicts that the trend will die out in the short term. In this context, he says banks’ raising their gold price targets is a bit worrying in terms of sentiment. Dillian explains his views as follows:
Gold will peak at some point near the $2,500 level. I focus on the feeling and it gets a little warmer. Those interested in gold, including me, became a little more bullish on Twitter. I think in the short term you will see an exhaustion of bullish sentiment followed by a pullback in prices.
Dillian, who invested 40% in gold, continues to maintain his position. But he also plans to hedge. So, “I expect a correction of about 10%,” he says. Considering its current price, a decrease at this rate brings gold down to approximately 2 thousand dollars.
Parabolic movement underneath?
Dillian, a financial expert, compares the future price movements of gold to cocoa. In this context, he says that gold could make a similar parabolic move. Cocoa prices have risen this year. Because there was a supply gap caused by the poor harvest in West Africa. Additionally, the El Niño weather phenomenon has created a drier climate in major cocoa-producing countries such as Ghana and Ivory Coast.
Dillian claims there are strong fundamentals for gold as well. But he draws particular attention to the alarmingly rising US debt level. According to Dillian, the US government is making high interest payments. Therefore, these payments will start to take up a significant part of the budget. Therefore, there is a possibility that the Federal Reserve will adopt yield curve control and print money directly from the debt. Dillian thinks the Fed will continue to buy bonds and print money in endless amounts this way. Finally, while Dillian doesn’t expect to see this parabolic move for gold anytime soon, he believes it could happen between 2024 and 2028.
“Gold will outperform Bitcoin!”
Dillian says that gold will perform better than Bitcoin in a year of geopolitical uncertainties. Because it does not see Bitcoin as a true store of value. In this context, the expert says:
If we are in a period of geopolitical turmoil, then gold should perform much better than Bitcoin. If we look at Bitcoin, it has not functioned as a safe haven in response to the recent Iran-Israel news. I don’t see Bitcoin as a store of value.
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