NEM - Analysts: Get Ready For Record Gold Prices
With markets hitting all-time highs almost every day it seems, it may be hard to imagine a world where gold stocks would have a chance. This is in light of the precious metal’s big run-up in 2019. However, some market analysts suggest the best is yet to come for gold stocks.
Bridgewater Associates’ Greg Jensen reportedly told Financial Times that gold could jump another 30% to record highs of over $2,000. The driving factors, he says, are central banks allowing inflation and mounting political fears.
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He joins a slew of big firms and investors supporting a bullish stance on gold. Things like the Federal Reserve and other central banks not tightening things like inflation or low-interest rates support higher gold. That’s according to the co-chief of Ray Dalio’s hedge fund.
More Bullish Climate For Gold Stocks
Aside from this, you also have to consider the wide disparity between “the 1%” and the rest of the economy. There’s also the U.S. and China trade war and threats in Iran. All of this could culminate in a boil-over for gold prices.
Last year the price of gold increased by roughly 13%. Also, despite current conditions for the general market, some think that this melt-up could be dangerous. The term “frothy” has started to make its way through the ranks of financial reporters.
Big banks are also placing a few bets on gold stocks right now. Credit Suisse looks for gold to “perform well” this year. Analysts in a recent report are looking for gold to average around $1,540 an ounce in 2020 with a possible “peak” around $1,560 in Q1.
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“This uncertainty is leading to most central banks around the world cutting rates, which is supportive of gold prices (lower yields lead to higher gold). In the U.S., the Fed has indicated a pause in rate cuts, but this stance could change quickly, as we saw last year, if economic fundamentals weaken.”
Credit Suisse