Analyst Jeff Clark of GoldSilver.com sees the gold price at prices above 1,400 US dollars in a position like shortly after the turn of the millennium. The real problems have not yet been priced into the price.
Threshold of $ 1,400 as basis
In an interview with Kitco News during the Silver and Gold Summit in San Francisco, Jeff Clark, Senior Analyst GoldSilver.com, talks about the current situation in the gold market and the prospects for the gold price. Numerous factors had led to gold breaking through the $1,400 barrier this year. He currently sees this price region as the basis for further price rises.
Gold price eruption like 2001?
If one goes back to the early 1970s, then the gold price chart shows strong similarities to the phase from 2001 to 2003. At that time, after many years, gold began a sideways movement to the big price breakout. At such a point he sees the current situation. “We have seen the break-out,” Clark said. It is not surprising that there are always short-term price fluctuations. He also points to the recent weakness in the gold price. “But if you look at the big factors driving the gold price, they haven’t made themselves felt yet,” the analyst says.
The big price drivers
Negative interest rates and increasing and geopolitical tensions, as experienced in the past, are only accompanying factors. He sees the unresolved debt problem as a central aspect, also in the USA. “The debts will never be repaid, in the form of the current US dollar. Also the factor that money will be printed again”, Clark said. No matter what you call it, QE or organic money supply growth (as the Fed recently called it), it is monetary dilution. And further currency problems are on the horizon. More than ten years after the great financial crisis, 18 of the G20 countries are still not in a position to show a balanced budget.
Overweighting gold and silver
“This can’t work. That is not sustainable. A new crisis could hit us from any direction. All risks (monetary, geopolitical, economic) would have increased further. And all this is very “bullish” for gold. “The big rise is definitely still ahead of us,” says Clark. This is the time to overweight gold and silver in the portfolio. If advises to double the share. If one normally holds 10 percent precious metal, 20 percent is now recommendable. “Gold and silver are usually defensive stocks. In the next bull market it will be offensive forms of investment. You’ll make money with gold and silver,” Clark says.