Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Gold prices are on their way to hitting $5,000, according to a top mining executive. Morgan Lekstrom, the President and Director of NexGold Mining expects insatiable central bank demand and worsening economic conditions to propel the dramatic price increase. While bolder than the average gold price forecast on Wall Street, Lekstrom’s position in the gold mining space offers unique insights into how the market is evolving.
Is $5,000 Gold Possible?
On the popular investment-focused David Lin Podcast, Lekstrom flexed his strong gold price prediction of $5,000, a whopping 85% gain from current prices. That prediction might seem far-fetched, but gold is no stranger to dramatic moves if the conditions are right. For example, gold was priced at $1,184 in 2018, and the yellow metal has since surged to a high of $2,672 — an impressive 125% increase in just six years.
Investors haven’t always had to wait that long to see explosive and maintained gold levels, though. For instance, prices jumped by more than 135% between 2008 and 2011 following aggressive rate-cut measures in the wake of the Global Financial Crisis.
The economy is entering a similar climate as the Fed launched one of modern history’s most aggressive easing programs. However, the towering $35 trillion debt is a significant variable that could prove to be rocket fuel for gold’s response to a possible economic downturn. Thus far in 2024, the yellow metal has already nearly climbed 35%.
Experts Raise Price Forecasts
Lekstrom joins a rapidly expanding group of experts who are raising their gold price predictions following the yellow metal’s powerful surge. For example, popular professional trader Gareth Soloway has targeted a $3,000 price point. Even traditionally conservative financial institutions such as Bank of America and Citibank have elevated their gold forecasts to $3,000, signaling market-wide confidence in the metal’s continued rise.
Evolving Gold Mining Landscape
During the interview, NexGen’s President and Director pulled back the mining industry’s curtain to give investors an insider’s perspective. Lekstrom highlighted how the market is undergoing a period of rapid consolidation as larger players increasingly aim to purchase smaller competitors within shorter-than-normal timeframes.
This uptick in mergers and acquisitions (M&A) is owed to more compressed mining cycles, heightened competition over limited resources, and booming gold purchases. In the past, Lekstrom explains, mining companies had the luxury of waiting for a pullback in demand and prices to “buy the dip” and secure companies at lower prices. Now, these M&As are moving quicker before prices move higher, indicating broad consensus in gold’s upward direction.
Sustained Demand Drains Supplies
Rapidly dwindling supplies are another market development likely to drive higher gold prices. Mining companies have raised alarms about the rapid depletion of gold resources as fewer cost-effective mines remain, making extraction increasingly expensive. Even the World Gold Council has cautioned that gold will become harder to find. This tightening supply, combined with record-setting central bank demand, creates the perfect conditions for a surge in gold prices.
Decisive Price Action
The rapid, forward-moving momentum of the mining industry is mirrored in gold’s decisive price movements. The yellow metal has been climbing at a faster pace than before, with fewer dips and shorter pauses along the way. This suggests steady demand as investors shift from traditional assets to safe-haven investments like gold. As a result, opportunities to enter the market before the next price surge are becoming increasingly scarce. The window for investors to capitalize on lower prices is shrinking, as gold’s trajectory continues to point upward.
“The [buying] opportunities are here…for people to jump on this market and…take advantage of the [gold] prices that haven’t gone up through the roof yet.”– Steve Rand, Senior Precious Metals Advisor at Scottsdale Bullion & Coin