Gold Is Glittering

We've been bullish on gold since it broke out above $2,000 per ounce at the end of February 2024. It has been trading in an upward channel since then (chart). It soared to $2,600 by the end of last year. In recent days, it has jumped to a record $3,300, which is the upper end of the channel. Our $4,000 target by the end of this year looks increasingly realistic. If that happens, then $5,000 would be our target for the end of 2026.

President Richard Nixon closed the gold window on August 15, 1971. This action ended the direct convertibility of the US dollar to gold, effectively dismantling the Bretton Woods system. Since then, there have been two major bull markets in the price of gold. The first one saw the price soar twentyfold from August 1970 through January 1980 (chart). In the second major bull market, the gold price increased sevenfold.