Despite the poor year to date performance of gold, Euro Pacific Capital’s chief executive officer, Peter Schiff is betting that gold will eventually climb to $5,000 an ounce.
Schiff strongly believes that the current price of gold will climb up by 300% from the $1,225.20 an ounce settlement seen on Thursday on the Comex. This marked the highest closing price for the precious yellow metal since the middle of February.
Year-to-date (YTD), gold is around 3% higher; however this commodity seems very far away from the overall high of nearly $1,900 seen in 2011.
The fact is gold’s performance has not been specifically exciting in the past few months. Overall, the price has declined over the past three consecutive months while also displaying declines last year and the year before.
Gold’s poor performance makes Peter Schiff’s seemingly inaccurate call all the more interesting.
In a telephonic interview with MarketWatch recently, Schiff’s said that there is no limit really on how high the price of gold can rise.
Over the years, Schiff’s reiterated his gold price forecast that has been long standing, which still needs to come to fruition.
Schiff, who is somewhat known for his U.S. central bank criticism, claims that hemming in gold & supporting the U.S. dollar (USD) may be the false perception among investors that the Federal Reserve will hike interest rates.
The U.S. economic growth almost came to a halt in the first quarter with a small GDP growth of a mere 0.2% annual price.
Schiff said that the Fed is still posing as if it will hike interest rates soon, but it will not.
According to Schiff, we will always be required to do quantitative easing to counterbalance the damages caused by the last QE. He also went on to knock down the Fed and to clearly state that they have done a very bad job with the monetary policy.
Schiff also explained that it’s like trying to douse a fire with gasoline, saying that’s all the Federal Reserve has, gasoline. Said differently, the central bank will keep on printing money and the price of gold will keep increasing.
Interestingly, Schiff making this point around a year ago. He also said that ultimately gold will see the $5,000 an ounce mark and it may even go higher.
MT4 Chart: Gold
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