Sprott is a Toronto-headquartered asset manager specializing in precious metals and critical materials (NYSE/TSX: SII), tracing its roots to Sprott Securities founded by Eric Sprott in 1981 and now led by CEO Whitney George. It runs physical gold, silver and uranium trusts, ETFs, active strategies and resource lending, with about $65bn in AUM. The Insights column carries monthly commentaries and white papers on uranium, gold, silver, copper and critical materials by Paul Wong, Jacob White and John Hathaway (ex-Tocqueville gold manager) — note the house's structurally bullish commodity stance, as it sells the corresponding trusts and ETFs.
Gold just hit a new record closing high above $2,072, breaking out of a three-year range. The rally is driven by signals that the Fed may pause rate hikes, a weaker dollar, and central banks (like China's and Russia's) buying gold at a record pace—1,225 tonnes last year. Interestingly, professional investors (such as hedge funds and gold ETFs) have been selling, creating the biggest gap ever between central bank buying and investor selling. Technical analysis suggests gold could reach $2,400. For ordinary investors, gold's long-term trend may have turned bullish, but watch the dollar and Treasury liquidity—if the dollar weakens further, gold could benefit more.
The Sprott report notes that on December 1, 2023, spot gold closed at an all-time high of $2,072.22, breaking through three previous peaks over the past five years ($2,063.54 on August 6, 2020; $2,050.76 on March 8, 2022; and $2,050.28 on May 4, 2023), marking a clear breakout from a consolidation r
This chapter focuses on the spot gold closing price breaking through the all-time high of $2,072.22 on December 1, 2023, ending a consolidation range that had persisted for over three years since 2020. The report argues that this breakout was jointly driven by a shift in macro policy, a weakening US dollar, and continued central bank purchases, marking the beginning of a new upward phase for gold.
The report’s core judgment is that gold has clearly broken out of its long-term consolidation range, with a technical bullish pattern targeting approximately $2,400, and there are repeated bullish fractals suggesting even higher technical projections. Counterintuitively, despite investment funds (CFTC and ETFs) net selling 288 tonnes of gold over the past 12 months, central banks have been buying at an annualized rate of 1,225 tonnes, creating the largest ever gap between the two. The report believes that central bank and sovereign buying provide a "floor support" for gold prices, akin to the "Fed put" after the financial crisis, and are unaffected by capital market pricing.
| Indicator | Data |
|---|---|
| Gold closing price on December 1, 2023 | $2,072.22 |
| Technical target | ~$2,400 |
| Central bank gold purchases in Q3 2023 | 337 tonnes |
| Average central bank purchases over past five quarters | 328 tonnes/quarter |
| Central bank buying pace post-Russia-Ukraine war vs. prior decade average | 2.58x |
| Central bank 12-month rolling purchases | 1,225 tonnes |
| CFTC + ETF 12-month rolling net sales | -288 tonnes |
| Treasury Liquidity Index vs. 2020 peak | Still above peak |
| R-squared of DXY and Treasury Liquidity Index | 0.75 |
| Frozen Russian foreign exchange reserves | Up to $650 billion |