If market experts are correct, then gold’s recent rally could extend beyond the short-term horizon. One analyst is predicting that it could push even higher in the next five years.
The precious metal has been pushing above the $2,000 price mark. This is thanks to the growing concern of a recession amid a hawkish U.S. Federal Reserve looking to raise interest rates to keep inflation in check. Recently, doubt in the stability of the financial system has also pushed investors toward adding more gold to their portfolios.
For investors thinking they may have missed the golden bandwagon amid rising prices, there’s still time according to Thorsten Polleit, chief economist at Degussa. Any dip in its prices could present investors with an ideal buying opportunity.
“If you are a long-term investor and looking to hold gold for the next five years, then this price is right,” he said. “Looking past the noise, gold prices are going to be a lot higher five years from now.”
As far as the shorter term goes, Polleit could see it reaching around $2,200 an ounce. As the referenced Kitco News report noted, patience is key for investors targeting gold.
“I’m actually thinking about raising my year-end target because of how gold is acting,” Polleit said in the Kitco News report. He that he sees a dis-correlation between what the capital markets are expecting and comments from the U.S. Federal Reserve. In particular, the time it takes for the markets to react to Fed news.
“Markets are pricing in rate cuts this year because there is a growing mistrust of the forecasting ability of central bankers,” he said. “Even if the Fed doesn’t cut rates as soon as markets expect, there is still plenty of support for gold because interest rates will be coming down. It’s just a matter of when.”
Two Ways to Get Gold Exposure
Investors looking to add the precious metal can look at the Sprott Physical Gold Trust (PHYS). The fund provides an enhanced physical bullion structure, offering the ease of purchase and sale that comes with being traded on an exchange.
Additionally, investors can also consider the Sprott Gold Miners ETF (SGDM). If demand continues to rise, this can have a domino effect on miners, which can provide indirect exposure to gold prices.
Per SGDM’s fund description, the ETF seeks investment results that correspond generally to the performance of its underlying index, the Solactive Gold Miners Custom Factors Index. The index aims to track the performance of larger-sized companies whose stocks are listed on Canadian and major U.S. exchanges.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
