Gold will reach $3k in market ‘melt up' with S&P 500 up at least 36% by Q4 2023 - David Hunter
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(Kitco News) - Gold will reach $3k by October as markets 'melt up,' with the S&P expected to see at least 36 percent upside, according to David Hunter, Chief Macro Strategist at Contrarian Macro Advisors.
"My S&P target is six to seven thousand," he told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. "My targets are gold to $3,000 pre-bust and silver to $60 pre-bust… We'll probably see most of the melt-up move by the end of the summer, which could mean Labor Day, but it could stretch into September."
Hunter, who correctly called the recent stock market bottom in 2020, claimed that markets are nearing the end of a 41-year secular bull cycle which began in 1982.
"That is when the disinflation trend began and interest rates peaked out," he observed. "I think the highs of this bull market will not likely be seen again for decades."
To find out which sectors Hunter thinks will see the most upside, watch the video above
Fed policy and a stock market 'bust'
In April, William Dudley, former President of the New York Federal Reserve, said that the Fed might need to "force" stocks to fail, to slow financial conditions and stem inflation.
Hunter suggested that Fed Chair Jerome Powell is listening closely to Dudley, and would be watching the stock markets in July to determine whether to raise the Fed Funds rate.
"It is very possible that when we get to 6,000 or above [in the S&P], that Powell is going to be pushing for rate hikes," said Hunter. "I'm very critical of both Dudley and Powell for this. I think the Fed is making a huge mistake in targeting the stock market."
The Federal Reserve has increased interest rates by 500 basis points since March of 2022, in an effort to stem high inflation, which reached a peak of 9.1 percent in June of last year.
Hunter claimed that the Fed had "gone too far" with its tightening, which he said could trigger a significant recession.
"We are in uncharted territory," he said. "The formula is, really, economic fragility caused by the pandemic, plus potentially the biggest policy error [over-tightening] in history by central banks, and plus leverage... You've got a formula which takes a normal recession into something far worse."
During this recession, Hunter forecasts that stock markets will "bust," and crash by up to 80 percent, peak-to-trough.
To find out how bad the recession Hunter forecasts will be, watch the video above
Gold and Silver
"I don't think very many assets are going to be able to escape a deflationary bust," he stated. "Let's say silver gets to $60 pre-bust. Silver could go back to the $20 to $25 area, and probably below that [in the bust]."
However, Hunter said that after markets bottom during the bust, gold and silver will see significant upsides which could see them reach 10X multiples by 2030.
To find out Hunter's price targets for gold and silver by 2030, watch the video above
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