Beaver Creek: Gold to soon hit US$3,000 amid short-term pullback

Gold is set to surge to at least US$3,000 per oz., says Florian Grummes, CEO of Midas Touch Consulting. But a short-term pullback to the US$2,050–US$2,150 range might happen first, Grummes told the Beaver Creek Precious Metals Summit Monday in Beaver Creek, Colo.

Supporting his prediction using technical patterns, historical performance, and sentiment analysis, Grummes pointed to a classic “cup and handle” shape on gold’s long-term chart, which he said has been developing for years and now signals an upward breakout. The pattern suggests an initial target of US$2,535, with further potential to reach US$3,000 or more in the coming months.

“The big question now is, do we get the pullback first, or will gold go directly for the spike?” he asked.

Amid the yellow metal’s historic peak of US$2,532 per oz. on Aug. 20, gold has been above US$2,000 per oz. for most of this year and higher than US$2,200 an oz. since late March.

Grummes detailed the market’s recent history, noting that gold spent four years consolidating after peaking at US$2,075 per oz. in 2020. This period allowed the market to absorb the gains made since 2015 when gold rallied from US$1,045 to US$2,075 — an increase of nearly 100%. He emphasized that the pullback from this high was moderate, at 22%, compared to silver’s sharper 42% decline.

Cautious optimism

While Grummes remains optimistic about gold’s long-term trajectory, he flagged some warning signals. Commercial traders currently hold large short positions, which is a potential source of volatility. At the same time, sentiment indicators show increased optimism, though not yet at euphoric levels.

“If gold breaks below US$2,430, it’s time to reduce exposure,” he advised, “but if it breaks above US$2,540, the spike to US$3,000 is on.”

Central bank purchases, particularly in Asia, are also a key factor driving the gold price. Grummes noted that countries like Russia and China have been steadily increasing their gold reserves, and this physical demand could further drive prices upward. Despite the strong fundamentals, he advised investors to be patient and prepared for short-term fluctuations before the anticipated rally takes hold.

He also emphasized geopolitical influences on gold prices, pointing to BRICS nations moving away from the U.S. dollar and tight physical supply in China and Russia as critical drivers for future price surges. BRICS, initially comprised of Brazil, Russia, India, China, South Africa, was joined by Iran, Egypt, Ethiopia, and the United Arab Emirates in January.