A renowned female market analyst on Wall Street has stated that despite the gold market struggling to attract new bullish momentum after recently hitting consecutive historical highs, the rebound is far from over. Chantelle Schieven, the head of research at Capitalight Research, pointed out in a recent interview that although a slowdown in the pace of interest rate cuts may continue to put pressure on gold in the short term as investors adjust their market expectations, geopolitical uncertainties continue to support the precious metal.
Schieven emphasized that geopolitical turmoil has been a key factor in the nearly 30% rise in gold prices this year. However, she added that the safe-haven premium for gold remains low, as investors are only just beginning to focus on specific hotspots, primarily the escalating conflict in the Middle East, where Israel's attacks on Hezbollah have triggered ballistic missile strikes from Iran.
She added that an increase in geopolitical tensions could easily push the price of gold as a safe-haven asset up by another 10%. "In this scenario, $3,000 per ounce is not far off," she said. "If we see an escalation of conflict in the Middle East, I suspect we will see $3,000 per ounce before the end of the year. But if tensions ease, we could also see a 10% pullback in the increase."
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Looking beyond short-term fluctuations, Schieven stated that gold remains well-supported as long-term factors begin to come into focus. She described the potential of gold as something that can change the market. "Some of the factors we are now seeing in the gold market are ones we started paying attention to and discussing 16 years ago," she said. "We have always considered issues like debt growth to be a long-term factor, but at some point, long-term issues will eventually become today's problems. All the little things we have seen in the past two years are now starting to accumulate, and that is what is driving gold prices higher."
Schieven noted that despite the impressive rebound in gold over the past year, the precious metal is only just beginning a new bull market cycle. "We are far from the peak of the gold cycle. We have not even reached the euphoric phase where prices really rebound," she said.
Schieven stated that she remains a long-term bull because it is difficult to see how the current supportive environment will change. She pointed out that even if the war between Russia and Ukraine ends, there will still be serious mistrust between Western and Eastern countries. She said that this mistrust will continue to undermine the dollar as countries forge new trade agreements and diversify.She said: "The world is moving away from globalization. The dollar will not disappear, but its role is diminishing as countries seek alternatives and continue to buy more gold."
At the same time, Schieven stated that the rise in sovereign debt levels, including those of the United States, is eroding the purchasing power of all fiat currencies. Despite the new leadership that the U.S. government will have next year, Schieven pointed out that neither of the presidential candidates addressed the issue of the national debt level, which currently exceeds $35 trillion, and regardless of who is in power, the government's deficit will continue to grow.
She added that, in addition to geopolitical uncertainties, the threat of a global debt crisis is the greatest danger facing the global economy.
She said: "Central banks cannot keep interest rates at such high levels, so there is greater uncertainty about inflation." "In my view, this factor will keep gold and silver in a bull market for the next few years."
Although the price of gold may reach $3,000 in the short term, Schieven stated that in a sustainable bull market, the price of gold will ultimately reach this level as well.
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