If you caught our mid-week Bulletin on Wednesday, you’ll already know that gold is on course to hit £2,357 ($3,000) before the end of this year, according to forecasts by Bloomberg Intelligence.
Speaking earlier this week, senior Bloomberg strategist Mike McGlone said that conditions were favourable for the yellow metal and offered momentum to the bulls. “Central-bank accumulation and the potential for a global economic slowdown, on the back of the most aggressive rate-hike period ever, may set the stage for gold to move toward £2,357 ($3,000) an ounce,” he explained.
A second expert has now lent his support to that projection, with David Hunter, the chief macro strategist at Contrarian Macro Advisors also forecasting price levels of £2,357 ($3,000) – but Hunter says we may well see that as early as the end of this summer.
The macro strategist believes the £2,357($3,000) price high will become a reality by August – and will then be followed by a recession. Driving the increase is a ‘melt-up’ of the S&P 500. “My S&P target is six to seven thousand,” Hunter said. “It is very possible that when we get to 6,000 or above that Powell is going to be pushing for rate hikes. I’m very critical of both Dudley [William Dudley, the former President of the New York Federal Reserve] and Powell for this. I think the Fed is making a huge mistake in targeting the stock market.”
Hunter believes that the next step will then be a painful recession – triggered by the Federal Reserve’s ongoing rate hikes action. He said, “We are in uncharted territory. The formula is, really, economic fragility caused by the pandemic, plus potentially the biggest policy error in history by central banks, and plus leverage… You’ve got a formula which takes a normal recession into something far worse.”
Hunter concludes that gold prices could increase ten-fold by 2030 in the wake of that economic depression.
With investors likely to join central banks in clamouring for the yellow metal, prices are almost certain to increase. Don’t wait for the price high and recession to hit.
Act now. Buy gold today.
