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- Gold prices could reach $ 4,000, the CEO of US Global Investors said, told CNBC on Monday.
- Frank Holmes said: “Quite easy enough to see gold going to $ 4,000”.
- Holmes said the rise in monetary stimulus is the main reason gold prices could rise to that level.
- Gold broke $ 2,000 for the first time last week, pending a US stimulus bill.
- Another strategist said developing a vaccine and U.S. presidential election could change the gold rush.
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Gold prices could explode more than 90% and reach $ 4,000 in the next three years as central banks show little sign of declining monetary stimulus, according to the CEO of US Global Investors.
Frank Holmes, CEO of U.S. Global Investors, told CNBC on Monday: “It̵7;s pretty easy to see gold going for $ 4,000.”
Holmes said the increase in the stimulus approved by central banks is causing gold to rise to unprecedented levels.
The G-20 finance ministers and central banks are “working together as a cartel and they are all printing trillions of dollars,” he added.
Extended monetary policy is usually supportive of gold prices, as it tends to lower borrowing rates.
Since gold does not bring interest on its own, when borrowing and savings rates are low, investors lose less by holding on to sticks than might otherwise occur when rates rise and other assets offer more attractive returns.
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Gold has been the darling of financial markets in 2020. the increase has been on the rise for 10 straight weeks, marking the longest earnings spread since the end of 2002. Since the end of July, it has broken record after record. , driven in part by a breakdown in US-China geopolitical relations that has sent investors who are flocking to safe havens.
Gold broke $ 2,000 for the first time ever last week. Mimi has earned more than 30% so far this year, making it one of the best-performing goods and even surpassing the Nasdaq-heavy-duty technology, which has grown by 18%.
The latest leg in gold has come after the US ordered the closure of the Chinese consulate in Houston and China subsequently ordered the closure of the US consulate in Chengdu late last month.
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Expectations for another stimulus bill in the US also helped push up the price.
Yung-Yu Ma, chief investment officer at BMO Wealth Management, said while expecting the price trajectory to continue to rise, he warned of a number of factors that could erode the gold’s luster and cause a reversal.
He told CNBC on Monday: “We are just being careful to extrapolate these current factors … especially when we know there are two major events on the horizon that could change that trajectory. One is, of course, vaccine development, and the other is elections “
“We think … especially the vaccine has the potential to shift some of those positive factors that are now working in favor of gold,” he said.
Analysts have previously told Business Insider that the US presidential election, a vaccine and improved geopolitics are some of the factors that could turn the rally into gold.
Third Bridge Group, a U.S.-based study provider, has said gold prices could sink below $ 1,600 after the US election.
But analysts at the Refinitive data provider said last week any delay in the U.S. election, as US President Trump suggested, could cause fresh uncertainty and could be a factor that continues to support gold prices.