Gold Price: 2025 Is the New 2011

Is gold truly on the verge of an explosive rally, or is the hype just another market illusion?

Gold market’s about to explode, because:

• Chinese investors are buying like crazy
• There’s gold shortage in London
• Gold market is manipulated
• Global banking system is going to collapse
• Derivatives market is going to collapse

…Really?

I read multiple comments on those points in the previous hours, days, and weeks. I noticed that they now emerge even more frequently than before – often accompanied by gold price forecasted at $10k or higher.

I'm not replying to them, as there's little point in doing so. I've been around for a long time, and I know that it won't change the mind of those that make such claims. There are rare exceptions, but in most cases, it's not about the analysis, but about a belief. And no number of facts will change one's belief is they are determined to believe it.

This is particularly the case if the multiple expectations are phrased in a way that paint a vivid picture of something taking place and then they are followed by a question if this could happen, and "what if". Human psychology works in a way that no matter how good one's reply is to that, what the reader will remember is the emotional image of something actually taking place. And since anything is possible about the markets, nothing can be ruled out. So, even extremely unlikely claims can't be ruled out. This, plus the emotional nature of the vision, makes people believe (!!!) that this scenario is much more likely than it really is the case.

Again, no point in debunking all that – that would only reinforce the original belief.

I don't want to leave all those claims without a reply, though. Actually, I already wrote that gold's shortage in London is simply about moving gold from one place to the other on Feb. 11, but – as you may have guessed based on the previous paragraphs – it did little to change the existing beliefs about gold. It "still" just "has to explode."

Consequently, today, I'll do something completely different.

I'm inviting you to join me in a time travel to 2011. It was a long time ago, so you may not remember how gold performed (except that it was the year that gold formed its multi-year top), or what experts were saying about it at particular times of the year. You may also not remember what kind of arguments they used to back up their more and more bullish approach. But I'll remind you.

Now, before proceeding, I would like to stress that I'm not bringing up the failed forecasts to prove that those experts' work is of low quality. I've also had those (still, contrary to some beliefs, I'm not shorting gold – there are much better options right now, and my last trade in gold was a long position that ended profitably). Quite the contrary. I highly respect their work and their contributions. It's normal that nobody can get all the price moves right – that's how the markets work. It's also a normal part of the human experience to get carried away by the sentiment. I'm quoting those forecasts to show that even the most informed experts can go way overboard with regard to their expectations for world events and corresponding price moves.

So, again, dear experts, if you are reading this, please keep in mind that when I disagree with you, I do so respectfully, and I'm not connecting the correctness of your analyses (let alone of a single market call) with your value as human beings – which I think is immense.

Also, there are many statistics here, so if I got something wrong, please reach out to me (you can find me on GoldenMeadow.eu) and I'll be happy to correct it.

Having said that, let's buckle up and set the time machine's computer to 2011.

 

Setting the Stage: The 2011 Gold Market

Let's start by revisiting how gold prices evolved in 2011:

• January: $1,388
• April: $1,503
• July: $1,628
• August: $1,813
• September 6: Peak at $1,923.70

Against this backdrop, a fascinating drama of market psychology played out through ten distinct narrative themes, each with its own champions and increasingly dramatic price predictions.

To clarify, there were more experts subscribing to a given narrative, but for clarity’s sake, I’ll stick to 1-3 experts per each narrative.

I’ll also show you how those forecasts evolved over time along with increases in gold price.

 

The Ten Major Narratives of 2011

1. Dollar Hyperinflation/Collapse

The Federal Reserve's quantitative easing program sparked widespread fears of imminent hyperinflation and dollar collapse (sounds familiar?). Key voices included:

Peter Schiff's Evolving Predictions:

• January: $2,000 by year-end
• March: $2,500 ("conservative target")
• May: $3,000-5,000 "within a few years"
• July: $5,000 "when QE3 starts"
• August: $7,500-10,000 "inevitable"

Jim Sinclair's Escalating Targets:

• February: $3,000 by end-2012
• June: $8,000 by 2014
• September: $12,500 by 2014

John Williams (ShadowStats):

• March: $2,500
• June: $3,500-5,000
• August: $7,500+ "with hyperinflation"

 

2. Chinese Gold Standard

A popular narrative suggested China was secretly accumulating gold to back the Yuan and replace the USD:

Jim Willie's Predictions:

• February: $2,500
• May: $7,500 "within 18 months"
• September: $12,000+ "when China acts"

James Rickards' Analysis:

• March: $2,500-3,000
• July: $5,000-7,000 "possible"
• September: $7,000-10,000 "in crisis scenario"

Max Keiser's Targets:

• January: $2,000
• June: $3,500
• August: $5,000 "when China moves"

 

3. Global Monetary Reset

This narrative centered on a complete overhaul of the global monetary system:

Ben Davies (Hinde Capital):

• April: $2,500
• July: $4,000-5,000
• September: $5,000-10,000

 

4. Gold Market Manipulation Exposure

Theories about paper gold manipulation led to predictions of dramatic price discovery:

Bill Murphy/Chris Powell (GATA):

• February: $2,000 "after manipulation ends"
• June: $4,000-8,000
• September: $10,000+ "true free market price"

Rob Kirby:

• March: $2,500
• July: $5,000-7,500
• September: $15,000 "eventual target"

Ted Butler:

• March: $2,200
• June: $3,500
• August: $5,000+ "post-manipulation"

 

5. European Union Collapse

Fears of Eurozone breakup drove dramatic predictions:

Marc Faber:

• January: $1,800-2,000
• March: $3,000
• August: $5,000+ "in crisis scenario"

Gerald Celente:

• January: $2,000
• June: $3,000 "when Greece defaults"
• August: $4,000 "in banking crisis"

Eric Sprott:

• January: $2,150
• June: $3,000-3,500
• September: $5,000+ "in banking crisis"

 

6. Peak Gold Theory

Supply constraints combined with Asian demand drove these predictions:

Frank Holmes (U.S. Global Investors):

• January: $1,850
• April: $2,500
• July: $3,500 "supply crunch target"
• September: $5,000 "long-term target"

John Embry (Sprott Asset Management):

• February: $2,200
• May: $3,000
• July: $4,000-5,000
• September: $6,000+ "with supply crisis"

Nick Barisheff (Bullion Management Group):

• March: $2,400
• June: $3,200
• August: $4,500
• September: $7,000 "peak gold scenario"

 

7. Global Banking System Collapse

Fears of a second wave of the 2008 crisis prompted dramatic forecasts:

Nassim Taleb:

• Progressive mentions of "much higher" prices
• By September: Referenced "order of magnitude" increase

Robert Prechter:

• February: $2,200
• May: $3,500 "in banking crisis"
• July: $4,500
• August: $5,000+ "systemic collapse scenario"

Martin Armstrong:

• January: $2,300
• April: $3,000
• July: $4,000
• September: $5,000 "with systemic failure"

 

8. Middle East Conflict Escalation

Regional tensions drove oil-crisis scenarios:

Jim Rogers:

• February: $2,000
• April: $2,500-3,000
• June: $3,500 "with oil crisis"
• August: $4,000+ "regional conflict scenario"

Dennis Gartman:

• January: $1,650
• March: $2,200
• June: $2,800
• August: $3,500 "with Middle East crisis"

Doug Casey:

• March: $2,500
• May: $3,500
• July: $5,000
• September: $6,000+ "regional conflict"

 

9. Central Bank Gold Buying Panic

Predictions centered on competitive central bank purchasing (this one is particularly prevalent also today):

James Turk (GoldMoney):

• February: $2,200
• May: $3,500
• July: $5,000
• September: $8,000 "bank buying scenario"

John Hathaway (Tocqueville Gold Fund):

• January: $2,000
• April: $2,800
• June: $3,500
• August: $5,000+ "competitive devaluation"

Felix Zulauf:

• March: $2,300
• May: $3,000
• July: $4,000
• September: $5,500 "competitive buying"

 

10. Derivatives Market Collapse

Concerns about gold derivatives drove squeeze scenarios:

Adrian Douglas:

• February: $2,500
• May: $4,000
• July: $7,500
• September: $10,000+ "physical squeeze"

Andrew Maguire:

• March: $2,000
• June: $3,500
• August: $5,000
• September: $7,500+ "derivatives collapse"

 

Is 2025 The New 2011?

This could certainly be the case, as the above-described narratives, especially the one about central banks competing against each other to buy gold along with peak gold / demand from Asia, are popular once again.

Fourteen years – and we still read about the same thing. Sure, I’m not saying that those events won’t take place eventually, they might. Like the EU’s eventual collapse seems likely to me. But will it happen anytime soon? It’s very doubtful. It’s MUCH more likely that all those points are now more popular because the price got so high. And since everyone and their brother are making those points, everyone that could have acted on those expectations, likely already did. And if so, what is there left for the price to do other than declining?

Let’s get back to the analytical point of view.

 

Key Patterns Observed

Prediction Escalation Patterns:

1. Initial predictions typically clustered around $2,000-2,500
2. Mid-year targets often 2-3x higher than January targets
3. Peak predictions frequently 5-6x higher than initial targets
4. Newsletter writers consistently more aggressive than fund managers
5. Most extreme predictions came within weeks of actual peak

Source Credibility Hierarchy

• Investment banks: Generally capped at $2,000-2,500
• Hedge funds: Typically $2,500-4,000 range
• Independent analysts: $3,000-5,000 range
• Newsletter writers: $5,000-10,000+ range
• Conference speakers: Often exceeded $10,000

Platform Effect on Predictions

• TV appearances featured more conservative targets
• Newsletter predictions typically 2-3x higher than TV targets
• Conference predictions often most extreme
• Private investor letters more measured than public statements
• Social media predictions most aggressive

Interesting, isn’t it?

But what is even more interesting is that all those analogies allow us to not just see how similar the current situation is to the 2011 top (yes) in gold, silver, and mining stocks, but we can also take a peek into the future, and make some forecasts regarding what we’re likely to see and read after the top is in and precious metals start to decline.

 

Post-2011-Peak Target Evolution

The aftermath of the peak provides particularly valuable insights.

1. Immediate Aftermath (September-October 2011)

• Most analysts initially maintained high targets, calling the decline a "healthy correction"
• Peter Schiff maintained $5,000+ targets through October
• Jim Sinclair kept $12,500 target but extended timeline
• GATA maintained manipulation narrative but stopped giving specific targets
   

2. First Major Revisions (November-December 2011)

• Many reduced targets by 20-30% but maintained bullish stance
• James Rickards revised down to $4,000-5,000 range
• Gerald Celente dropped targets to $2,500-3,000
• Eric Sprott maintained $3,500-4,000 range but extended timeline
   

3. Narrative Adaptation (Early 2012)

• Focus shifted from imminent crisis to "delayed" scenarios
• Many converted specific targets to vague "much higher" predictions
• Time horizons extended from months to "next few years"
• Crisis scenarios remained but urgency diminished
   

4. Target Revision Patterns

• Newsletter writers were typically last to reduce targets
• Fund managers were generally first to acknowledge changed outlook
• TV commentators quickly adopted more conservative targets
• Most dramatic reductions came from those with highest peak targets
• Many shifted from specific prices to percentage gain predictions
   

5. Excuse Patterns

• Central bank intervention blamed for delay
• "Manipulation" narrative strengthened to explain decline
• Timeline extensions without price target reductions
• Shift from price targets to "gold as insurance" narrative
• Focus on "accumulation opportunity" rather than price targets
   

This period serves as a classic example of how market psychology can create self-reinforcing cycles of increasingly extreme predictions during the uptrend, followed by a complex pattern of reluctant target reductions and narrative adjustments during the subsequent decline. The resistance to reducing targets, even in the face of contrary evidence, demonstrates the powerful psychological forces at work in bubble scenarios.

In other words, we can expect the experts to dismiss the fact that the top was actually in, calling it a correction, extend time targets and finally (but it will likely take months) to lower the targets, but to keep them very bullish, anyway – just not as extreme. Remember – gold then continued to fall for years to come, silver and miners (HUI Index) never regained their peak levels, and they were only able to correct 61.8% and 50% (respectively) of the 2011 – 2015/2016 decline.

Oh, and there’s one more thing that I’m 99% sure that we’ll read is that when the prices fall. We’re almost certainly going to read that the prices only fell on the futures market, but they hold up well on the physical market (physical premium will likely increase), which will be interpreted as a proof of manipulation, and that “real” gold price is not declining. Of course, the premiums will most likely decrease over time. We experienced that after silver peaked above $30 in 2020, when I also warned that the reasons for silver to soar in the long run were solid, but that the timing was completely off. Did many listen? Of course not. The belief (!) was too strong – it was not about the analysis.

 

Parallels to 2025

Today's market shows remarkable similarities:

1. Multiple crisis narratives gaining traction simultaneously
2. Escalating price targets as gold moves higher
3. Increasing focus on supply shortages and Asian demand
4. Growing predictions of monetary system changes
5. Similar evolution of public vs. private predictions

But wait, there’s even more! After all, the way price moves has impact on the way people behave – that’s one of the points of the technical analysis – to recognize those patterns and act accordingly instead of following the crowd.

 

Technical Similarities between 2011 and 2025

I already wrote about it in my previous Gold Trading Alerts, and all that remains up-to-date:

You see, back in 2011, gold topped right below the all-important $2k mark. This time, it topped right below the all-important $3k mark.

The additional remarkable detail here is that gold topped in a double-top pattern then, and it seems to have done the same also this time.

Sharp rally to new highs in gold, smaller rally and not to new highs in silver, and a head-and-shoulders pattern in the GDXJ – that’s exactly what we see right now, with the only difference being that in 2011 we had lower lows and lower highs while the H&S pattern was formed, and this time, we have higher lows and higher highs. But overall, miners and silver still underperform.

The dashed lines are parallel – GDXJ is forming the right shoulder for the broad H&S pattern. Some might say that it has a one big left shoulder and some will say that there are several left shoulders, but it really doesn’t matter. Both forms of the H&S pattern are acceptable. We have a one distinct high (the head) and we have an overall declining volume during the pattern.

Given gold’s turning point, the panic-led nature of the most recent upswing (we’re running out of gold!), miners’ underperformance (no breakout above the 2024 high), and the overall similarity to 2011, it seems that the top is at hand, and we are well positioned to take advantage of it.

 

Linking 2011 and 2025 – Summary

The history doesn’t repeat itself to the letter, but it does rhyme. People’s emotions get out of hand, and they keep on forecasting higher and higher prices as the price rallies – that’s how price bubbles are formed, speculative manias, parabolic upswings – you name it. Yes, the gold market has a bullish fundamental situation, given all the problems that we have in the world. Silver has multiple reasons to rally as well.

But it does NOT mean that they are likely to rally in the following months. The market got ahead of itself, and the extremely bullish sentiment is a reason to be cautious (if you want to be conservative) or bearish (if you want to be bold). I’m not suggesting shorting gold, given its safe-haven nature; it could soar given some kind of geopolitical development, but miners (and also silver to some extent) provide much better risk-to-reward opportunities. Got gold in your IRA for tax purposes? And / or perhaps your gold is already providing you with income? Plus, you’ve got some physical that you can hold in your hand for insurance purposes? Then you’re probably covered against any sudden upswing in gold, and can drop the perma-bullish narrative, focusing on the short- and medium-term price moves.

Who was shorting at the 2011 top? Well, most likely not the experts that I quoted above. But you have a chance to be positioned for the ultimate medium-term corrective downswing and making the most of it.

If you enjoyed the above analysis, please note that there’s so much more available to premium subscribers. If you want the best, you’ll find it in our Diamond Package. There are many other premium plans available, though. Choose the one that suits you the most. And if you’d simply prefer to stay up-to-date with what we have available for free, our free gold newsletter would be a good choice – sign up today.

 

Thank you.

Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief