Turnaround artist Wilbur Ross says gold prices are headed higher, though his prediction isn’t based on fundamentals of supply and demand.
Gold prices have surged to record highs in recent months amid fears of inflation, surpassing $1,200 an ounce.
“To me gold is a psychological commodity,” Ross, head of WL Ross & Co. told CNBC.
“It’s not really an industrial commodity. There’s plenty of gold producible, especially at these prices. So it’s really a momentum trade on a global scale rather than anything that has intrinsic value.”
With top investors such as hedge fund manager John Paulson increasing their gold-related holdings, the precious metal could keep rising to $2,000, Ross said.
Real estate investment icon Sam Zell is bullish on gold too, though he says he’s not “loading up” on it for himself.
“Part of the reason that you’ve seen the kind of increases in the price of gold is the fact that if you really step back from the world, almost universally and in tandem, the paper currencies of the world have been devalued,” he told CNBC.
Many other investors agree with Ross, Paulson and Zell on gold.
"I think over the next 60 to 90 days, I don't think it's unreasonable to assume that $1,250 could be another possible target," Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund, told TheStreet.com. "We still haven't hit the prior lows for the U.S. dollar.”
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