Gold and silver have undergone a sharp correction following a historic rally. Peter Schiff, an American economist, admits it: he was surprised by the severity of the move. But for him, nothing has changed. 💰
🔍 What’s going on?
During the Plan B podcast in El Salvador, Schiff delivered his analysis without mincing words. The recent decline in precious metals is technical, not structural. Liquidations of leveraged positions and massive profit-taking have amplified the move.
At the time of writing, gold is trading around $4,573 per ounce. For Schiff, this type of correction offers an entry point for new investors. The market can catch its breath without invalidating the underlying trend.
💡 Why does this matter?
Schiff’s central argument centers on U.S. debt. It continues on an exponential trajectory, regardless of which party is in power. The United States can no longer repay its debt without resorting to structural money creation.
Result: the dollar is gradually eroding. Foreign central banks have once again become net buyers of gold after decades of selling. This strategic shift reflects a loss of confidence in a system based solely on the greenback. For Schiff, we are witnessing an implicit return to an international gold standard.
📊 Our View
We agree with Schiff’s assessment. U.S. debt is the real driver behind gold’s rise.
The Federal Reserve is trapped: raising rates sustainably would make debt servicing unsustainable. Lowering or maintaining rates fuels inflation and erodes the dollar. In both cases, gold comes out on top. Central banks have understood this by accumulating massive amounts of gold over the past several years. In Europe, the ECB faces the same dilemma with Italian and French debt. The inflationary scenario is not limited to the U.S. The AMF and ESMA are closely monitoring flows into precious metals, a sign that the trend is spreading to the continent.
For French traders, the current correction is an opportunity to enter the market for physical gold or gold-backed ETFs. We expect the upward trend to resume within the next six months.
✅ Key Takeaway
- The correction in precious metals is technical, not structural, according to Schiff
- U.S. debt makes money creation inevitable and supports gold
- Central banks have been accumulating gold on a massive scale for several years
- The Fed can no longer tighten its policy without triggering a major crisis
- Gold remains a safe haven amid the dollar’s erosion
What do you think? Are you taking advantage of this correction to build up your gold positions, or are you waiting for confirmation of a rebound?
🔎 See also
To learn more, check out all our Commodities analyses on ActuTrading Commodities 📈
Source: Plan B Podcast Salvador, Peter Schiff
