As the gold price consolidated near the record high of $2,500 per ounce, a market analyst warned investors not to draw premature conclusions about the gold market.

John LaForge, director of physical asset strategy at Wells Fargo, recently said in an interview that after he raised his year-end target price to $2,500 per ounce, gold price has experienced another breakthrough. In the latest rally, the gold price has risen 23% year to date, setting historical highs over 20 times.

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

LaForge noted that in the first few years of the gold market, specifically in 2020 and 2021, gold's performance was disappointing compared to other commodities. Most commodity prices doubled, while gold finally reacted. This rebound is significant because it confirms that we are in a supercycle.

Looking ahead, gold prices have risen over 20% year to date, and as we enter the last few months of the year, the upward momentum may begin to slow down. However, LaForge believes that this trend will not reverse quickly.

LaForge stated, "We may see some pullback or gold prices may continue to rise. Currently, the market is biased towards the upside, and although the rebound may slow down, it seems that $2,500 is the next target."

On top of the gold price breaking the barrier against the US dollar, LaForge added that an important reason for the continued rise in gold price is that it has reached historical highs against all major currencies this year.

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

As for the factors driving the market, LaForge stated that inflation is still a key factor driving the uptrend, but he added that concerns about inflation have shifted. At the beginning of the super cycle, gold was supported by commodity-driven inflation, as the prices of commodities such as copper and lumber soared due to supply shortages.

LaForge stated that despite the slight weakening of commodity-driven inflation, investors are now heavily buying gold to hedge against debt-driven inflation.

LaForge said, 'Debt continues to grow, I don't think this situation will change. The rise in debt could actually extend the super cycle longer than the 10-year average. I just don't know how this country (the USA) will repay $35 trillion of debt.'

Although LaForge is bullish on gold, he is not as optimistic about silver. He added that silver may perform well because it usually follows in the footsteps of gold, but the performance of other precious metals is not expected to surpass gold.

LaForge mentioned that as the economic slowdown weighs on US manufacturing, weak industrial demand will affect silver demand, limiting its price potential.

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