Kitco commentator Stewart Thomson argues gold is more likely to climb toward $4,800-$5,000 than to slide to $3,500-$3,200, even as central bank selling and Indian tariff pressure weigh on demand. He frames the recent pullback as a buying opportunity rather than a reason for fear.
Gold is more likely to grind toward a sell zone of $4,800-$5,000 than to fall back to $3,500-$3,200, according to Kitco commentator Stewart Thomson. He expects the price action to stay sluggish, weighed down by central bank selling and demand pressure out of India.
Thomson said his earlier call to buy the $4,100-$3,900 zone across gold, silver, and miners has already played out, and he now looks for a rally toward the modest sell zone. He had also advised keeping cash ready for deeper buying at $3,500-$3,200 if a dip into that area occurred.
The headwinds pressing on price
Two conflicts are draining official reserves, in Thomson’s view. He said the Iran war and the Ukraine war have pushed some central banks to tap their gold savings, and that selling has offset ongoing purchases by other central banks.
India is the other drag. Rather than selling its own metal, Thomson argued the Indian government has leaned on tariff taxes targeting gold-oriented citizens, a move he estimates has likely removed 50-75 tons of monthly demand from the market. Because of that pressure, he expects price action to stay slow.
A swipe at the bearish case
Thomson took aim at Western analysts who, he said, reduce gold to an asset that pays no interest. He noted that gold surged from about $1,800 to $5,600 with rates in the $4.5%-5% range, undercutting the argument that higher rates should drive investors out of the metal.
He also pointed to official inflation data as part of the problem. Thomson claimed the government’s CPI, PPI, and PCE reports understate the inflation ordinary citizens face, making “real” interest rates appear much higher than they are.
Silver and miners in focus
Silver is holding above support in a way Thomson reads as a sign of strength, with the $50 zone roughly in sync with $4,000 gold. He suggested value-oriented buyers should not fixate on pinpointing a final low.
For mining shares, Thomson described a bull wedge with GDX right at the technical sweet spot for a breakout and said key senior miners carry debt-to-equity ratios in the sub-0.20 zone. His bottom line: buy modestly, without fear.
Source: KITCO
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