Look for the price of gold to hit $5,000 very soon, Peter Schiff, president of EuroPacificCapital tells the financial news network CNBC.
Gold at “$1,200 is not expensive, considering all the money that we’ve created and all the money we’re going to create—not only the Federal Reserve, but central banks around the world,” Schiff says.
Schiff reckons inflation pressures will power gold prices up to $5,000 an ounce and investors should grab the commodity as quickly as possible.
“It might not hit $5,000 this year or next year, but it will eventually—maybe before Barack Obama leaves the White House,” Schiff says.
The year 2012 is not far off, but as the economy continues its slow recovery, and the real impact of the central bank’s increased printing of dollars becomes apparent, demand for gold is “going to explode,” says Schiff, a well-known gold bug. “Gold is money, not just some other commodity. People are going to go back to traditional money.”
Schiff accurately predicted the recent run-up in gold prices, CNBC notes.
Another factor contributing to the increasing price of gold is that the cost of mining has gone up. “The economics are not there,” says Schiff. “Exploration budgets have been cut.”
Many investors want to take part in the gold trend.
The Wall Street Journal is reporting that Standard & Poor's Corp. has launched a new index designed to allow investors to participate in stock-market gains while hedging with gold.
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