Frank Holmes, CEO at investment firm U.S. Global Investors, predicted that the seemingly endless surge in gold prices is far from over, with the precious metal fully capable of soon soaring to a new breath-taking record high.
“It’s quite easy to see gold going to $4,000,” Holmes recently told CNBC.
He pointed to the trillions of dollars needed in stimulus to tide the U.S. economy during the coronavirus pandemic, and added that G-20 finance ministers and central banks are “working together like a cartel and they’re all printing trillions of dollars,” CNBC explained.
“We’ve not seen this level where central banks are printing money at a zero interest rate. At zero interest rates, gold becomes a very, very attractive asset class,” Holmes said.
Meanwhile, the speed at which gold has broken above $2,000 an ounce has left some in the market fearing a correction, but many analysts predict more gains as the coronavirus crisis spurs investors to buy into bullion's relative safety.
The record-breaking rally has made the precious metal one of 2020's best performing mainstream assets, Reuters explained.
It has risen $500 this year, and $200 in the last two weeks alone.
Taking out the totemic $2,000 barrier means investors must change their reference points, said Frederic Panizzutti at Swiss precious metals dealers MKS.
"The adjustment will be higher. We are definitely in a bull run," he said.
A hoarding spree has fueled the rally, with investors adding 922 tonnes of gold worth $60 billion at current prices to their stockpiles in exchange-traded funds this year, according to the World Gold Council.
Investors see gold as an asset that should hold its value as the health crisis and money printing by central banks erode the value of others.
© 2021 Newsmax Finance. All rights reserved.