With the Federal Reserve walking an increasingly tricky tightrope to try and bring inflation down without pushing the economy too far into a recession, one gold industry expert says that the precious metal has a ‘very good chance’ of exceeding its previous price record.
Jupiter fund manager, Ned Naylor-Leyland says the gold bugs are emitting lots of positive signs. He says that the expectation of a recession is a prompt to hold gold, explaining “This is where the value of holding alternative currencies such as gold and silver will come good… gold and silver are bets that future real rates are not going to rise as much as the market thinks because the Fed won’t be able to pull it off. A hard landing or recession won’t necessarily make inflation go away – think about stagflation. On the other hand, rate hike expectations would disappear pretty quickly, in my opinion. That would be good for gold and silver.”
Naylor-Leyland believes gold will soon be pressing closer to its all-time high. “I think that gold has a very good chance of breaking through the [inflation adjusted] £1,735 ($2,100) record. Records are made to be broken and dollar strength will not last forever.
“Looking ahead, I think the conditions are right for a move back to a more dovish environment and a Fed pivot. That’s why I believe it’s the perfect time for prudent investors to own gold.”
