New price jump ?: Thanks to central banks: expert believes gold price of $ 10,000 possible | message

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The gold price has increased by more than a third in the past twelve months. A sharp price surge occurred in connection with the downturn on the financial markets, due to the uncertainties about the economic consequences of the corona pandemic. But an expert believes that the precious metal can soon go much higher.

Gold price down to $ 10,000?

In an interview with “The Street”, Frank Holmes, CEO of US Global Investors, issued an extremely high possible price target for gold: In his view, the gold price could reach an unprecedented level.

The expert referred in particular to the prevailing market conditions. “We still have negative real interest rates, and that’s a good sign of gold. I think gold can easily cost $ 2,700, like palladium last year. It can also be $ 5,000. I don’t know when Money pressure stops, but it could go up to $ 10,000 to get the world economy back on its feet, “said Holmes.

Central banks provide incentives

The central banks – in particular the US Federal Reserve – will be a price driver, believes Holmes. After all, the Fed had provided $ 5 trillion to expand its balance sheet, which the investment expert called “unprecedented”. In his view, the gold price could react similarly to this stimulus as it did after the financial crisis in 2008: at that time, the price of the precious metal had soared, which in 2011 reached $ 1,908.79 – the all-time high for gold to date.

To make a leap to the $ 10,000 price mark that Holmes believed possible, the precious metal would still have to pick up momentum: Gold is currently trading around the $ 1,700 mark, so the price would have to increase almost six times.

Frank Holmes considers the leap possible, however, as he emphasized in the interview: “We are waging a third world war against the pandemic, an unprecedented event, and the monetary policy response will bring the gold price to an unprecedented level”.

The expert also referred to the global supply chain disruption that the lockdown efforts have brought with it in numerous countries. This also affects the gold industry, according to Holmes. “I think there are enormous supply disruptions worldwide and I think that the demand for gold will pick up much faster than the supply,” he emphasizes.

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