Gold could surge more than 90% and hit $4,000 if these two factors remain under control
- Gold prices could reach $4,000, the CEO of US Global Investors told CNBC Monday.
- Frank Holmes said: "It's quite easy to see
goldgoing to $4,000."
- Holmes said rising monetary stimulus is the main reason gold prices can soar to that level.
- Gold broke $2,000 the first time last week, on expectations of a US stimulus bill.
- Another strategist said development of a vaccine and US presidential elections could reverse gold's rally.
Gold prices could explode more than 90% and hit $4,000 in the next three years as central banks show little sign of reducing monetary stimulus, according to the CEO of US Global Investors.
Frank Holmes, CEO of US Global Investors told CNBC Monday: "It's quite easy to see gold going to $4,000."Holmes said rising stimulus being enacted by central banks is causing gold to soar to unprecedented levels. Advertisement
G-20 finance ministers and central banks are "working together like a cartel and they're all printing trillions of dollars," he added.
The most recent leg higher in gold came after US ordered the closure of the Chinese consulate in Houston and China subsequently ordered the closure of the US consulate in Chengdu late last month.
Expectations of another US stimulus bill also helped boost the price.Yung-Yu Ma, chief investment strategist at BMO Wealth Management, said while he expects the trajectory of prices to still slope upwards, he warned a number of factors could erode gold's shine and trigger a reversal. Advertisement
Ma told CNBC Monday: "We're just cautious extrapolating these current factors ... especially when we know there are two big events on the horizon that could change that trajectory. One is, of course, the vaccine development, and the other is the elections.""We think ... especially the vaccine has potential to shift some of those positive factors that are working right now in the favor of gold," he said.Advertisement
Analysts have previously told Business Insider that US presidential elections, a vaccine and improving geopolitics are some of the factors that could reverse the rally in gold.
Third Bridge Group, a US-based research provider, has said gold prices may sink below $1,600 after after the US election.But analysts at data provider Refinitiv said last week any delay to the US elections, as US president
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