Here's What Could Drive Gold to a Record in Next Two Years: Top Forecaster
Rising inflation and sagging confidence in the ability of central banks to revive global growth will drive up gold, according to Incrementum AG, which says bullion could climb to a record in the next two years.
Consumer prices are set to rise as oil rebounds, while low or negative interest rates and bond buying by central banks have failed to boost economies, said Ronald Stoeferle, managing partner at the Liechtenstein-based company, which oversees 100 million Swiss francs ($101 million). Incrementum was the top precious metals forecaster last quarter, Bloomberg-compiled data show.
“Inflation may surprise to the upside and this will be the moment when you want to have some gold in your portfolio,” Stoeferle, 35, said in an interview. “Not the absolute level of inflation, but the momentum and the direction of inflation is the most important driver. In this uncharted territory, with big monetary experiments going on, it just makes sense” to hold bullion, he said.DYI Comments: If oil prices continue to rise it will act like a tax slowing down the economy. If they rise significantly this will tip the U.S. and possibly the world economy into recession. Short term there will be some inflationary impact but rise high enough and quickly a recession will follow.
Which way will gold go? In the short term DYI has no idea and nor does anyone else. However, the DOW/GOLD RATIO is at 14(rounded) to 1. There is still is room for gold to run despite being a bit expensive.
DYI's model portfolio shows a modest gold position as the easy days back in the year 2000 are firmly behind us.
Updated Monthly
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