Tags: Schiff | gold | higher | Treasurys

Schiff: Gold May Look Bleak Now, But It’s Headed Higher

By    |   Sunday, 05 August 2012 09:51 AM

While “gold is currently priced for collapse,” that’s not going to happen, says Peter Schiff, CEO of Euro Pacific Precious Metals.

Gold has dropped 17 percent from last year’s record of $1,924 an ounce, recently trading at $1,603 an ounce.

“Many investors believe the yellow metal has topped out and are selling into every rally,” Schiff writes on ResourceInvestor.com.

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However, “future investors may come to view spring and summer 2012 as the opportunity of the decade,” he says.

Schiff expects gold to hang around $1,600 an ounce for a while before bursting higher, and additional easing by the Federal Reserve might serve as the trigger, he says.

“This could be spurred by the announcement of [a third round of quantitative easing], a calming of fears in Europe or any shock to the Treasury market,” Schiff writes.

“Treasurys have temporarily overtaken gold as the primary safe-haven asset. Once that dynamic is broken, I believe the counterflow into gold will be tremendous.”

It’s Treasurys that are headed for a collapse, not gold, Schiff says. “[T]he market for U.S. dollars and dollar-denominated debt is headed off a cliff, which will send the price of precious metals soaring.”

Others are bullish on gold, too.

HSBC analysts predict it will soar to $1,900 per ounce by year-end. “Economic uncertainty, geopolitical tensions and the uncertainty of the U.S. November elections are theoretically gold-bullish,” they write in a report obtained by CNBC.

They see a weak U.S. economy and dollar pushing the precious metal higher.

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