Gold industry veteran Gary Wagner says that gold will move ‘substantially’ higher and his reasonings coincide with our last few special reports, underlining the need to act quickly to secure your gold investment before prices escalate.
Wagner cites the persistently high levels of inflation, plus the unrest that continues to unfold at the Russia – Ukraine border as being indicative of a price surge being just around the corner.
Wagner also says that gold won’t be hemmed in if the dollar also gathers strength in the event of a war between Russia and Ukraine, explaining “I think that dollar strength and gold can move in tandem during that kind of a conflict, in the same way that U.S. equities and gold move in tandem when you have a highly accommodative Federal Reserve.” This is good news for gold prices as it means that substantial moves higher won’t be impacted by how the dollar is behaving.
As we have reported previously, inflation continues to climb higher and when this is considered in line with the geopolitical worries which provoke market instability and risk off sentiment, there’s plenty of room for the gold bulls to run unchecked. Wagner says that it could be years before the rate of inflation subsides to a level deemed acceptable to the Federal Reserve on a practical level. With data this week confirming that core inflation has grown 6.9% year-on-year, it’s inevitable that businesses and consumers will feel even more of a pinch.
“Obviously, as wholesale prices go up for manufacturers for goods and services, they will inevitably pass those higher prices onto the consumer,” Wagner says. “Anytime you have the PPI going higher, the first thing that it tells you is that inflationary pressures aren’t stabilizing, they’re not peaking, they are in fact going to continue to move higher. Add that to the PCE that came out, that is also at a 40-year high, and really what we’re looking at is persistent inflation that, I believe, will not go to a target level by the Federal Reserve for at least two years.”
Wagner expects that inflation will push gold to notable levels in the short term, with a price target of £1,479 ($2,015) within three to six months. His long-term forecast for gold, provided that inflation hovers between 4% and 7% for the next two years would see gold setting a new record high at around £1,541($2,100).
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