The difficult balancing act between economic stimulus and soaring government debt, coupled with a cycle of better than expected, followed by worse economic data and simmering international tensions which adds up to the perfect conditions for gold to ascend much higher this year, says market analyst, Philip Streible.
Streible expects gold to hit a new all time high before the end of this year with an expectation that the precious metal will reach £1,963 ($2,500). He explained that current conditions and market behaviour all point to the up side for gold, saying “What happens is you get this better than expected economic data. The fear of missing out triggers U.S. equities. [Investors] to sell gold. They buy equities… U.S. interest rates then start to rise just a little bit. But remember, the rise in the equities (because there’s no real economy that’s out there) is all at the demise of the dollar because the Fed is continuing to print money. So what that does is it takes the U.S. dollar lower, real interest rates then go lower, inflation expectations go higher and that’s what will power gold to a new all time high.”
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