VanEck portfolio manager Joe Foster says that while positivity that vaccines could see the COVID-19 pandemic finally brought under control might be holding gold prices in check for now, escalating inflation is expected to push the precious metal to new highs in the second half of the year.
“The £1.36 trillion ($1.9 trillion) stimulus bill, created an outlook for strong economic growth and euphoria in the markets,” he explained, but expects that this will have a temporary impact as the expected outlook for inflation favours far higher gold prices in the medium term. He confirmed that he remains bullish on gold, noting, “The most likely catalyst [for price increases] would be excessive inflationary expectations. Inflation expectations have returned to pre-pandemic norms, although a number of developments suggest it could rapidly spiral out of control.”
Inflation has been regularly cited as a propeller for gold prices and, with more and more experts forecasting soaring rates on the near horizon, now is the time to buy.