3 Reasons Gold Prices Will Shatter All-Time Highs – And Keep Rising

The price of gold has rallied by 30% since March 20, from $1,454 to $1,892. It is now merely $30 away from reaching a new record high for the first time since 2011. Investors believe the rally of the precious metal will not slow down in the near-term for three key factors. They are fears of inflation, rattled markets as a result of geopolitical risks, and stalled economic recovery.

Historically, the precious metal has consistently acted as a compelling hedge against inflation. If interest rates in the U.S. and Europe remain at near-zero, Wall Street investors say the metal will stay attractive. Mark Mobius, the co-founder of Mobius Capital Partners, said in an interview on Bloomberg TV:Earlier this week, analysts at Citigroup and Goldman Sachs raised a similar argument. They said that gold is a primary beneficiary of low-interest rates.

Gold has a long way to go, and prices will be strong. Peter Schiff, the chairman of SchiffGold, said the fundamentals backing gold are different from that of stocks. In recent weeks, Wall Street traders have increasingly expressed fear towards an over-valued stock market. But Schiff believes gold stocks are cheap, and stagnation in the stock market is unlikely to affect the precious metal.

Schiff said: Since gold stocks rose with the market, traders sell them when the market falls. But the fundamentals for gold stocks are much different than for the overall stock market. While the stock market is over-priced, gold stocks are still cheap, and stagflation is bullish for gold.

3 Reasons Gold Prices Will Shatter All-Time Highs – And Keep Rising, CCN, Jul 24