Gluskin Sheff chief economist David Rosenberg says gold will hit $3,000 as
global stock markets are repeating the downturns of 2010 and 2011 and it
is time to search for safety.
There's a “very good
opportunity in gold” as it has corrected and seems to be “off
the radar screen right now," Rosenberg tells the Financial Times.
Gold traded late Friday at about $1,584.
“Gold and gold
mining stocks look to have significant value.”
Over time, Rosenberg says, gold is acting less like a commodity and more
like a currency. And, rather than benchmark gold prices against other
metals, gold is increasingly benchmarked against the dollar.
“It’s not about being bullish or bearish,” Rosenberg
says. “It’s about how you view the world.”
Right now, Rosenberg observes, “central banks are going to keep
short-term interest rates in real terms negative as far as the eye can
see.”
“That is critical, because one of the most
crucial determinants of gold price is real short-term interest
rates,” he says. “The longer they stay negative, the longer
the gold bull market is going to be.”
Rosenberg also
suggests that investors uncomfortable with government bonds consider
corporate debt instead.
“We’re probably at an
inflection point for corporate earnings, which leaves the stock market
perhaps vulnerable,” says Rosenberg. “Corporate bonds now are
actually priced for a five percent default rate — right now the
default rate is about two percent — so you have a nice
cushion.”
“Corporate bonds are a very good place
to deploy your cash now, in my opinion.”
The Saudi
Gazette reports that gold prices are expected to witness an increase of 10
percent to 17 percent during the coming four months compared to the first
quarter of the year.
DISCLAIMER: All of the provided information is believed to be accurate, however errors are possible. The opinions in the Commentary section do not necessarily reflect the opinions of GoldIRAS.com. Past performance of any investment is no guarantee of future performance. All investments have risk.
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