Gold Prices 'could reach $3,000 per oz' in the long term
A well-known US economist has predicted that Gold Prices will reach between $2,000 and $3,000 per ounce in the next few years, Mineweb reported yesterday (October 5th).
The yellow metal has found favour with investors because of weakness in the dollar - with which it shares an inverse relationship - and fears over future inflationary pressures.
Jeffrey Nichols, head of American Precious Metals Advisors, has explained that both factors are contributing to his bullish view about the future direction of Gold Prices.
"Although many are beginning to talk about economic recovery, those that are seeing green shoots are looking through rose-colored eyeglasses and there is significant risk of a double-dip recession with further contraction and a second down-leg yet to come," he said, according to the news provider.
"We have never in the economic history of the US seen a period of rapid growth in money and credit nor an extended period of negative real interest rates that has not been followed by a declining dollar exchange rate and a rising inflation rate at home."
The plight of the dollar was also identified as a positive sign for gold last week by Ralph Preston, an analyst at Heritage West Futures.
He explained that despite recent minor pullbacks in the metal on the occasions when it has passed $1,000 per ounce, the overall trend is upwards because the greenback is set to incur further losses.
"The dollar still looks like a ripe apple about to fall. Customers are coming in and buying gold on the dips," he said in an interview with Bloomberg.
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