Recently, Peter Schiff, Chief Global Strategist at Euro Pacific Capital, stated that although gold prices have retreated significantly from historical highs and been snatched away by Bitcoin, the true bull market for precious metals has only just begun.
On Monday, spot gold surged to $2144 per ounce, breaking a historic high set in May of this year, before noticeably falling. It is now reported at $2027 per ounce, with a cumulative decline of over $100. "Many people believe that this is all over and the end of the golden bull market," Schiff said, "but I think this is just the beginning of a new bull market."
He said that in the past few months, the market has built a huge support for gold prices
He pointed out that the impressive performance of precious metals is due to the overwhelming demand from investors.
Schiff is known for his accurate predictions of the performance of the stock market, commodities, gold, and the US dollar, and his views are often cited by major news media. In recent years, due to the debt problem in the United States, he has been very optimistic about gold. Meanwhile, he is also one of the sharpest critics of cryptocurrencies, repeatedly predicting that the price of Bitcoin will fall to zero.
Speaking of Monday's historical high, Schiff believes it may be a joint result of geopolitical concerns and speculators taking action in low liquidity situations. "The catalyst is the escalation of geopolitical tensions in the Middle East, and I believe there will be more such incidents in the future."
He added that although there has been a significant decline in gold prices, the $2000 level is a solid support level because "as long as it falls below $2000, there will be a lot of buying." Schiff said, "I think we have cleared the obstacles and a huge increase is coming."
When it comes to market expectations for the Federal Reserve's rate cut, Schiff believes that no matter what the central bank says, interest rates are already on the way down. "Wall Street is already pricing the rate cuts for the first and second quarters of next year, and for them, the rate hikes have come to an end."
"Moreover, when the Federal Reserve raised interest rates, gold could have risen above $2000. Therefore, in the current stage where the Federal Reserve stopped raising interest rates and is about to lower them, the price of gold can be imagined." Schiff said that inflation in the United States will not become lower in the short term, and the current 3% and 4% are already the limits that the central bank can reach.
The Federal Reserve can fight inflation by shouting, but it won't really bite because it doesn't have teeth. But if they really do anything to control inflation, it will create an environment that could lead to a financial crisis and also put the US government in bankruptcy.
Schiff firmly believes that now is a good time to buy gold, but the entry point for silver is even better. "It is still around $25, while the trading price of silver in 1980 was $50 per ounce. Think about what happened in the past 44 years... how much can you buy with the money from 44 years ago today? If you don't have silver, now is definitely a good time to buy."
As usual, Schiff once again fired a shot at Bitcoin. "Bitcoin has taken a lot of the spotlight on gold today, and all the financial headlines are paying attention to what happened to Bitcoin, and few even pay attention to what happened to gold." He said that the rise in cryptocurrency is fueled by "rampant speculation," based on the prospect of the United States approving several spot Bitcoin ETFs.
But Schiff believes that there is no huge demand for such ETFs. "The people waiting for spot Bitcoin ETFs are sellers, especially those 'whales' who may see this as an opportunity to sell large amounts of Bitcoin to buyers."