As gold prices consolidate near record highs above $2500 per ounce, a market analyst warns investors not to draw premature conclusions about the gold market.

John LaForge, head of physical asset strategy at Wells Fargo, recently said in an interview that just after he raised his year-end target price to $2500 per ounce, gold prices have seen their latest breakthrough. In the latest round of upward trend, the gold price has risen by 23% so far this year, setting a new historical high more than 20 times.

LaForge pointed out that attempting to predict where this rally will end is at best futile. He added that this rebound is just the market catching up with other sectors that rebounded at the beginning of the super cycle.

LaForge pointed out, "In the first few years of the gold market, namely 2020 and 2021, gold's performance was disappointing compared to other commodities. Most commodity prices doubled. Gold finally reacted, and this rebound is significant because it confirms that we are in a super cycle

Looking ahead, the gold price has risen by over 20% so far this year, and as we enter the last few months of the year, the upward momentum may begin to slow down; However, LaForge stated that he believes this trend will not reverse soon.

LaForge said, "Perhaps we will experience some pullback, or gold prices will continue to rise; currently the market is trending upwards, although the rebound may slow down, I think $2500 seems to be the next stop

LaForge added that he believes an important reason why gold prices will continue to rise is that gold prices are not just breaking through against the US dollar. He pointed out that this year, the exchange rate of gold against all major currencies has reached a historic high.

Although not an official opinion, LaForge stated that he personally believes that gold prices may reach $3000 in the next few years. This level is significant as it represents the historical high of gold prices adjusted for inflation. At current prices, the gold price is less than 20% away from this target.

As for the factors driving the market, LaForge stated that inflation remains the key factor driving the upward trend, but he added that concerns about inflation have shifted. At the beginning of the super cycle, gold was supported by commodity driven inflation as prices of commodities such as copper and wood skyrocketed due to supply shortages.

LaForge stated that although commodity driven inflation has slightly weakened, investors are now aggressively buying gold to guard against debt driven inflation.

LaForge said, "Debt continues to grow, and I don't think this situation will change. The rise in debt may actually drag the super cycle longer than the 10-year average. I just don't know how this country (the United States) will repay its $35 trillion debt

Although LaForge is optimistic about gold, he is not so optimistic about silver. He added that silver may perform well as it typically follows in the footsteps of gold, but it is expected that other precious metals will not outperform gold.

LaForge stated that as the economic slowdown drags down the US manufacturing industry, weak industrial demand will affect silver demand, which will limit its price potential.

He said, "I think silver will have short-term upward momentum, but in most cases, gold is a metal worth paying attention to.