Gold's three-leg forecast
The gold bull market moves in three "leg ups," and prices are now in the second leg. Leg one ran from about 2,000 to 5,500, a rise near 3,500. Leg two started at 4,000 and targets around 6,500, a gain of about 2,500, though it could run a little higher or lower before a correction, likely sometime next year. Leg three is expected to peak, correct back to about 5,500, then run to around 8,000. A possible fourth leg could reach 9,000 or 10,000, but three legs are the firm expectation. The years in play are 2027 and 2028, possibly 2029.
The confident call is a trend to somewhere between 7,000 and 8,000. That is where all mining stocks get sold, with everything sold by 8,000. Selling early is acceptable because entering early allows leaving early.
Corrections inside the bull market are getting shorter. The last one lasted about 7 months. The next ones should run about a month, shallow rather than deep. The deep correction has already passed.
Why the exit matters more than the top
The danger is not the target, it is exit discipline. Miners multiply both gains and losses, so a peak can wreck a portfolio when trading dries up and buyers vanish. Past gold cycles ended with brutal declines, which is why confidence fades above 7,000 to 8,000.
History shows how harsh endings get. In 1980 gold ran to 850, crashed to about 150, then stayed near 200 to 250 for roughly 20 years, from 1981 to 2000. Gold peaked at 1,900 in 2011, then fell hard through 2015 and 2016 to about 1,500, going down for 5 years, and stayed low until 2024 with only a weak bounce in 2016. That decline lasted about 12 years, 2012 to 2024.
The current bull market took off in January 2024 at 2,050. A longer count starts in January 2020 at 1,500, since little happened between January 2020 and January 2024, and the breakout from 1,500 to 2,000 marks the start. Using January 2020 as the beginning points to a 9 to 10 year bull market ending in 2028 or 2029.
When gold peaks, the correction is unknown. It could fall to 5,000 or 6,000 and stay stuck there for 5 years, or it could keep ripping to 10,000, 12,000, or 15,000. Nobody knows the answer. A long bull market can still hold devastating drops, so timing the exit may matter more than squeezing out the last dollar. The next ending will probably be brutal too, because history tends to rhyme.
Silver targets
Silver upside changes once gold nears 8,000, because the ratio between the metals does the heavy lifting. Using Michael Oliver's percentage method with gold as the base makes the math simple. With gold at 4,600, 1% is 46, which is far too conservative. 2% is 92, and 3% is about 120. At 8,000 gold, 2% gives 160 and 3% gives 240, landing around 200 between the two levels. So 150 to 175 is very conservative, and a good top target is 200 to 300. Michael Oliver expects 300 to 500.
Silver miners get absurd
Silver miners cannot be priced at 300 silver because free cash flow gets crazy, with margins near 200 an ounce. A year ago miners did not even have 10 margins. At 500 silver the margin is about 400 an ounce, and some stocks could become 50-baggers, so valuing a miner at that level is pointless because the numbers get too wonky. Even at 200 silver, miners go bonkers. Those 200-plus margins turn silver miners into extraordinary cash flow machines.
The Fed is quietly printing again
The Fed has been buying bonds since January, running quantitative easing all year while its balance sheet expands. The reason is treasury borrowing. The Treasury borrows about 10 trillion over a 12-month period because it must roll over about 8 trillion, since Janet Yellen bought everything on the short end and Bessent does the same, so everything has to be rolled over.
Rolling over means borrowing more, which is the doom loop. They must print more and more money to fill the void because auctions cannot be allowed to fail. The Treasury does not want to buy bonds but does so to help, and this gets progressively worse.
Foreign buyers avoid 10-year duration or longer. They show up on the short end, from 3-month to 2-year, though less than before. Demand for the 5, 10, 20, and 30 year is much weaker. The 20 and 30 year have been brutal over the last four years because rising rates push bond values down. The bond market is becoming fragile and troublesome, and it is unlikely to improve.
Inflation reignites
Inflation is set to pick up. War with Iran and moves in the Strait of Hormuz mean fewer ships come through. Diesel prices are way up. The crack spread, the margin between what refiners pay for oil per barrel and what they sell diesel for, sits at an all-time high near 100 per barrel in profit, which pushes diesel higher because converting oil to diesel now costs much more. Energy prices are rising. One analyst says higher transportation costs will push everything up about 8% in the near term, matching the energy cost rise, passed straight to consumers. That adds upward pressure on the bond market again.
The debt math is untenable
The national debt just hit 40 trillion this week. Interest payments run over a trillion dollars against only 5 trillion in tax receipts, which is 20% of receipts, basically untenable. It cannot be brought down because the only way to cut interest is lower rates, and rates stay stubbornly high because of inflation. This is a slow-motion wreck: interest payments feed into bond yields, which feed into inflation, and any attempt to fight it makes the problem worse.
The Fed is trapped
The Fed once could act ahead of trouble. Volcker took the federal funds rate to 16 or 18 in the late 1970s and early 1980s and could set rates anywhere, zero to 18. It printed 4 to 8 trillion in 2020. Those tools no longer exist. The Fed's hands are tied.
The Fed has two choices: fight inflation, which it cannot, or protect economic growth, which it will. There is no chance it raises rates in July. Fighting inflation is a sideshow, maybe 5% of the concern. Economic growth is 95% of the priority, and inflation of 3%, 4%, or 5% is acceptable as long as growth stays positive.
The irony is that growth is not even the official mandate. The mandate is supposed to be stable inflation and full employment, but full employment is now an afterthought, with 3 to 5% unemployment and 3 to 5% inflation seen as livable. Neither inflation control nor full employment functions as a real mandate anymore; they are goals and objectives, not commitments to solve a problem. The old rescue playbook now threatens the system it was meant to protect. Aggressive rate hikes would worsen government interest costs, while easier policy would restart inflation. Gold benefits from that trap, not because central banks want it higher, but because their choices keep narrowing.
