Gold headed to $US7000 as echoes of the 1970s grow louder

Many investors who piled into last year’s blistering rally in gold had probably never seen anything like it before, given the 65 per cent price surge was the yellow metal’s best annual return since 1979.

But for Victor Smorgon Group’s veteran gold-watcher, Cameron Judd, the current bull market is eerily similar to the 1978 to 1980 supercycle when the US Federal Reserve famously lost its battle on inflation.

That episode – which saw US rates spike above 19 per cent – eroded faith in the US dollar at a time when investors were craving safe haven assets from the Iranian Revolution and Soviet invasion of Afghanistan, which rocketed gold 127 per cent higher in 1979.

Judd said the current rally, which kicked off in 2024, had tracked a remarkably similar trajectory in its first two years. So if history continues to repeat itself, gold is destined for huge gains this year.

“At the beginning of 1980, the US dollar gold price peaked at $US850 an ounce, [which was] 66 per cent higher than the price at the start of the year,” he noted.