Bridgewater sees gold spiking 30% to a record high - 'There is so much boiling conflict'

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  • Gold could spike 30% to a record high of over $2,000 an ounce as central banks allow inflation and political fears mount, Bridgewater Associates boss Greg Jensen told the Financial Times.
  • The Federal Reserve and other central banks won't clamp down on inflation or raise interest rates in the near term, supporting a higher gold price, Ray Dalio's co-chief at the world's largest hedge fund, told the newspaper.
  • "There is so much boiling conflict, that gold being part of a portfolio makes sense to us," Jensen said.
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  • Watch gold trade live here.

Gold could spike 30% to a record high of over $2,000 an ounce as central banks allow inflation and political fears mount, Bridgewater Associates boss Greg Jensen told the Financial Times.

The Federal Reserve and other central banks won't clamp down on inflation or raise interest rates in the near term, supporting a higher gold price, said Ray Dalio's co-chief at the world's largest hedge fund. "That's a big deal."

Gold could also benefit from the widening gap between rich and poor Americans, and rising tensions between the US and China, Iran, and others, Jensen told the Financial Times. The FT article didn't specify a time-frame for the gold rally.

"There is so much boiling conflict, that gold being part of a portfolio makes sense to us."

In fact, rising inflation and soaring budget and trade deficits could lead to gold eventually replacing the US dollar as the world's reserve currency, Jensen told the newspaper.

"When you look at the geopolitical strife, how many foreign entities really want to hold dollars?" he said. "What are they going to hold? Gold stands out because it's nobody else's liabilities as a possibility."

The price of gold rose about 13% in 2019. It was up 0.6% at $1,554 at the time of writing on Wednesday.

US stocks are also "frothy" after a decade of outperformance, Jensen told the newspaper, providing another reason to favor gold.

However, other analysts are skeptical of a gold rush.

"Those kind of gains are possible going forward, but we would need to see a major correction in equity markets that drags central banks into further easing," Neil Wilson, chief market analyst for Markets.com, told Business Insider, referring to Jensen's outlook.

"Gold has topped out and may need to consolidate for a while."

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