Gold Bugs Finally See Their Predictions of Doom Coming True
The comments below are an edited and abridged synopsis of an article by Eddie van der Walt, Ranjeetha Pakiam and Jan-Patrick Barnert
As the coronavirus brings economies around the world to a standstill, gold is rivaling Treasuries and the dollar as the best-performing major asset this year. The metal proved its safe-haven status with a 6% rally as almost $16 trillion was wiped off global stock markets and oil plunged.
There’s also been a scramble for physical metal as investors in ETFs build the biggest stockpile in history, and dealers say they’re struggling to find gold to sell.
Up for discussion: How the coronavirus shows again why fear and gold go together; when a hot gold trade blew up, the rush for 100-ounce bars began; physical metal has no counterparty that can default; and even those in the mainstream are climbing on board.
Analysts at Citigroup see gold climbing to a record above $2,000 an ounce in 2021. Merk Finck chief strategist Robert Greil predicts it will rise to $1,750, and Cesar Perez Ruiz, who manages 236 billion Swiss francs ($243 billion) at Pictet Wealth Management, has been buying on dips near $1,500.
“Gold might be one of the few things that diversify your portfolio,” said Chief Investment Officer Ruiz. “It’s moved quite fast very recently, so I’m waiting for a pause.”
“Before this is over, gold is going to go up a lot,” commodity investor Jim Rogers said. “Whenever people lose confidence in money and in governments, they always buy gold and silver.”
