Tom welcomes back Chris Rutherglen, a PhD scientist, engineer, CFA, and publisher of ‘The Gold Investor Research’ Substack to discuss his gold and silver price targets and the data-driven, fundamental, and technical arguments behind them. Rutherglen predicts that gold will reach a target of around $6,500 to $6,700 by summer to October 2024, before the mid-term elections. For silver, he expects a target of approximately $175, also within the same timeframe. He bases these predictions on historical cycles, the Fed Funds rate, and other economic indicators.
Rutherglen explains that gold prices tend to rise during the declining phase of the Fed Funds rate cycle and peak around the midway point of this cycle. He also notes that the S&P 500 and real yields are leading indicators for gold’s peak. Currently, neither indicator suggests that gold is at its peak. Rutherglen also discusses the money supply and its relationship with gold prices, arguing that the Fed’s actions often do not align with their stated narratives. He also highlights the importance of the 10-year real yield, which tends to decline as gold prices peak. Currently, the 10-year real yield is still above 2%, suggesting that gold prices still have room to rise.
Rutherglen also mentions the potential for a significant drop in gold prices after the peak, followed by a QE period where gold prices could reach even higher levels. Rutherglen also discusses the volatility in gold and silver prices, noting that increased volatility near the end of a cycle is normal. He suggests that the current volatility is not a sign of an impending crash but rather a sign that the market is getting closer to its peak. He also discusses the commitment of traders reports, noting that a decline in managed money traders’ positions can be an early warning sign of a peak in gold prices.
Finally, Rutherglen cautions against using simple price-to-earnings ratios for mining stocks, as they do not account for changes in production levels. He suggests using an instantaneous price-to-revenue ratio as a better metric. He also identifies B2 Gold as a potential investment opportunity due to its low production costs and upcoming changes in its production profile.
Timestamps:
00:00:00 – Introduction
00:00:35 – Gold Silver Targets
00:02:40 – Silver Price Context
00:04:30 – Cycle Position Analysis
00:09:40 – Money Supply Dynamics
00:14:10 – Stock Market Indicators
00:18:00 – Real Yields Impact
00:22:42 – Gold Market Analysis
00:27:30 – Bond Yield Projections
00:31:00 – Mid-Cycle Price Charts
00:40:30 – Silver Projections Analysis
00:49:00 – Post-Peak Scenarios
00:55:00 – Inflation Expectations Gold
00:57:52 – Targets & Expectations
Guest Links:
Substack: https://giresearch.substack.com
X: https://x.com/CRutherglen
Chris Rutherglen is a private investor whose primary occupation is in science & engineering with a focus on novel semiconductor devices for microwave and mm-wave applications. He began investing in the precious metal space in 2003 and has done well following a value-oriented investment approach. Although he has never been employed in the finance/investment field professionally, he did complete level 3 of the Chartered Financial Analyst (CFA) program in 2011. Chris has a BS in physics from the California Institute of Technology and a Ph.D. in Electrical Computer Engineering from the University of California, Irvin
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