Gold Is Shining More Brightly Than Ever Before

We turned bullish on gold last year when the spot price of the shiny metal decisively rose above $2,000 per ounce (chart). We attributed this new bull market in gold to Russia's invasion of Ukraine in February 2022. In response, the United States and its allies froze the international reserves of Russia's central bank. That convinced the central banks of countries with autocratic governments, which are naturally hostile to the US, to increase their gold purchases.

Earlier this year, when the price of gold was slightly below $3,000, we projected that it might remain in the rising channel that started in late 2023, reaching $4,000 by the end of this year and $5,000 by the end of 2026 (chart). So far, so good. Today, the spot price of gold broke out of a recent consolidation pattern to a new record high of over $3,500. The nearby futures contract hit $3,600 today.