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Investment management and advisory firm Goehring & Rozencwajg expects gold to hit record highs this year. “I wouldn’t be surprised to see a price of $3,000 this year,” said an executive at the firm. “It’s time for people to want to be bullish on gold.”
Investment firm Goehring & Rozencwajg’s managing partner, Leigh Goehring, shared his outlook for gold in an interview with Kitco News last week. Goehring has 32 years of investment experience specializing in natural resource investments. He is co-manager of the Goehring & Rozencwajg Resources Fund.
“Gold is going to break records this year,” he began, noting that the metal hit a peak of $2,050 in August 2020 and again in March last year. The manager told the news agency:
This year we’re going to break through the all-time high … It’s time for people to want to be bullish on gold.
He believes that the Federal Reserve will stop raising interest rates and maybe even start lowering them. “Then we will have another big inflationary problem … This is the decade of inflation,” he warned. After a series of 75 basis point interest rate hikes, the Fed raised its benchmark interest rate by 25 basis points last week.
Goehring expects investors to turn to gold when they realize that inflation will not come down to the Fed’s 2% target. “Right now, when inflation is rising, the Fed is raising interest rates, and people are selling gold,” he described, adding:
I think the psychology is going to shift to inflation going up, the Fed not raising rates or lagging, and inflation becoming a real problem.
The investment manager compared the current situation with what happened in the 1970s. “After the Fed started raising interest rates aggressively from 1973, gold prices corrected by 45% … When the Fed finally relented a few years later, year-over-year inflation was still at 5%,” he explained. Noting that the market will realize that the Fed’s rate hikes are coming to an end and inflation is not done, the manager said: “Back in the 1970s, when people saw that inflation was still a big problem, that’s when the price of gold started going crazy after the bottom at the end of 1976.”
While admitting that he does not know “how high gold can go,” Goehring opined:
I wouldn’t be surprised to see a price of $3000 this year.
Gold’s spot price was at $1,869 an ounce at the time of writing, with gold futures at $1,882. Goehring is not alone in expecting the gold to reach a record high this year. Market strategist Gareth Soloway believes gold will be the best performer in 2023. Rich Dad Poor Dad author Robert Kiyosaki said in January that gold could reach $3,800 this year. Meanwhile, Harry Dent has predicted that gold could fall to the $900 to $1,000 range over the next 18 months.
Do you think gold will reach $3000 this year? Let us know in the comments section below.
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