Central Banks Buying Gold Could Be Catalyst for $3,000 Gold Price

6.1.22 - Catalyst for $3,000 Gold?

Gold last traded at $1,848 an ounce. Silver at $21.88 an ounce.

News Summary: Precious metal prices remained stable Wednesday on bargain hunting and rising U.S. Treasury yields. Stocks started June in a slump as worries mount over economic growth.

Lombardi Letter--"If you're trying to figure out where gold prices are headed next, you can't ignore central banks. They could be one of the biggest catalysts to take gold prices to $3,000 per ounce much sooner than expected.

Central banks have been buying gold for years, and it doesn't look like they'll stop anytime soon. Here's the kicker: it's not the major central banks that have been buying the yellow precious metal lately; it's the smaller ones. The major central banks already own a lot of gold.

Central banks don't make an announcement before buying gold for their reserves. They buy it first and announce it later.

Central banks' actions have been speaking louder than words, saying they want more gold. They've been net buyers of the yellow metal since 2010. In the first quarter of 2022, they bought gold again, 84 tonnes of it. That's a slightly lower amount than during the same period a year ago, but they remain buyers....

Dear reader, what central banks are doing these days when it comes to purchasing gold is grossly underreported in the mainstream media. It doesn't get reported much because the gold market is considered boring, not like hot technology stocks or cryptocurrencies.

Central banks need gold as the world becomes more polarized and currencies get questioned. The yellow precious metal has a history of preserving wealth in times of currency devaluation and crisis. Central banks know this well. They hold a lot of currency in their reserves and will need a lot of gold to hedge against volatility. This will help gold prices get to $3,000 per ounce.

Given what central banks did in the first quarter of 2022, my stance on gold is as bullish as ever. Over the past few months, gold prices have held at the level between $1,800 and $1,900. There could be a solid base building, and I wouldn't be surprised if, in a few years, we look back at these prices and say, 'Wow, gold was cheap.'"