$3000 Gold! But For How Long?
Friday, 3/14/2025 10:16
Comex gold price breaks $3000, just like the hot-money bet...
SO the PRICE of GOLD is already through $3000 per ounce on Comex gold futures and London bullion
is barely 50 cents away right now
has broken it too,
writes Adrian Ash at BullionVault.
Cue much excitement in the market
and the media. Just like we saw at $1000 in 2008 and $2000 gold in 2020.
Thing is, getting to those levels gave the gold price a bad case of 'watched pot' both times. And once the gold price in Dollars broke through, it edged back...and then took a while to get there again and hold it.
Eighteen months for $1000 gold. Three-and-a-half years for $2000.
The $3000 level is nothing special in itself. But big round numbers have fired up the market only to spook it twice in the past. Might the same happen again?
$1000 gold
Gold flirted with $995 for 2 weeks in March 2008 before finally topping the $1000 level on the Monday morning after US investment bank Bear Stearns collapsed.
But gold traded with a $1000 handle for just 3 days before the Fed's fire blanket smothered fears of contagion. Which showed up with Lehman's failure that September. It boosted the Dollar and
sucked speculative credit out of all markets, including gold.
The price fell hard in USD (while setting new ex-Dollar highs). Then, as QE and zero interest rates fought to stem the collapse in world equities, gold traded back below $1000 for the next 18 months before decisively breaking that level.
In fact, after the Bear Stearns' top, bullion prices took 369 trading days to get there again, only to flip $10 above and $10 below before finally taking out the $1000 level on the last day of September 2009 and never looking back.
Well, not quite. Gold fell as low as $1045 six years later.
$2000 gold
Despite jumping 7-fold during the Tech Crash and then global financial crisis, gold missed $2000 by $80 at its 2011 peak.
Bullion then took 9 years to get near that level again, when Covid sent gold prices soaring...
...because lockdowns crushed the price of useful stuff (oil futures briefly went sub-zero), whereas the ultimate safe haven was and is supremely useless for anything much beyond storing wealth and value.
Perfect for the prison planet of 2020.
Gaining 1/3rd from the first Wuhan cough of late November 2019, gold hit $2000 per ounce in early August 2020, but stayed there for only 4 sessions.
Priced in Dollars, gold then lost $70, bounced to $2008, but took another 388 trading days to get there again...
...a feat it managed for only 2 sessions as Russia pushed towards Kyiv in its all-out invasion starting February 2022.
From there, it was another 266 days before gold broke $2000 again, holding that level for almost 2 weeks before flipping below, and above, and then below 3 times in spring 2023 amid the 'mini crisis' in US tech-sector banking.
Gold then kissed $2000 goodbye yet again that May. It waited a further 132 trading days to top it in the November, only to flip and flop some more, and then finally rise above it...
...before dropping $10 below on Valentine's Day 2024...
...and then finally, FINALLY, moving to have and hold $2000 from that day forth. So far.
$3000 gold
Gold priced in Dollars began last year at $2100 per ounce, and it came into 2025 at $2600.
So its year-to-date rush is dramatic, repeating most of 2024's record Dollars-per-ounce gain inside 10 weeks.
What's more, and rushing higher as Donald Trump delivers exactly the policy chaos he had promised in the US election, gold set 10 new all-time Dollar price highs in February. That matches the 1-month count of <gulp> Sept 2011.
But markets move opinions, of course, and bank analysts are now rushing to revise their 2025 gold price forecasts higher, if only from $3000 to $3100 for the more bullish forecasters.
The speed of gold's ascent means that private investors sound equally 'meh!' with the New Year forecast from BullionVault users now looking all-too doable at $3070. That seemed a much bigger stretch when we asked back at $2600.
Fast forward to mid-March and $3000 gold is just a heartbeat away (at pixel time). Which is right where the hot money wants it.
Gold's hottest hot hotties love gold options, of course, because if they call it right, then each $1 staked a Comex bet can become many more.
The most active contract is now April. And can you guess what the single heaviest strike-price is by far for April Calls?
Yep, $3000 per ounce. As of Thursday night, that bet accounted for 6.7% of all open Call options in Comex gold derivatives, followed by $3050 with 4.3% of open interest.
In fact, more than 2-in-5 April Calls are for strikes at $3000 or above. Whereas would-be sellers now holding Puts have staked less than half-a-percent of their Open Interest at $3k or above.
So what happens now that April gold futures have touched and moved up through $3000 per ounce?
The hot money's biggest bet has paid off, and those happy-clever traders will no doubt want to close their Calls and bank their profit. And if the history of $1000 and $2000 gold gives any guide, the metal might then struggle to stay there, at least at first.
But does history apply here in 2025's Trumpian world?
Yes, the 5 silliest words in finance always claim that "Things are different this time". But they really might be for gold right now.
First,
gold has only just returned to favour among Western investors, rather than breaking $3000 amid an investing mania. Second, the crisis which investment cash is trying to protect against has barely begun.
Trump uncertainty and fear mean that US stocks have so far lost only 10% from their record high of just 1 month ago. He's still got the best of 4 years in the White House. And on a 5-year horizon, as we never tire of repeating,
gold has always been higher when the S&P500 index has lost value. Well, very nearly.
Sure, things could be different this time. But if
the US trade war now raises the cost of living while hurting growth like everyone expects, then the resulting stagflation will provide the perfect backdrop for investing in gold.
Meantime, here's to $3000 gold and the furious re-writing of analyst forecasts it will provoke.
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