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The price of gold hit a record high of $2,328.7 per ounce last week, and one famous economist predicts the metal could reach $3,000 before the next economic cycle.
David Rosenberg, president of Rosenberg Research, said in a recent note that the current gold rush is “especially impressive” because it has outperformed Bitcoin and all major currencies, as well as overcoming the macro headwinds that often devalue the asset, reveals the ‘ Yahoo Finance’.
Rosenberg attributes the rise in gold prices to strong demand, driven by the asset’s reinstatement as a reserve asset by central banks. With the Chinese yuan losing its position as the world’s second reserve currency and countries like Japan, Russia, Turkey and Poland fearing excessive dependence on US dollars, many are looking to gold as a safe alternative.
Furthermore, the increased industrial use of gold, especially in the electronics sector, is also boosting prices. The boom in circuit manufacturing, as producers work around the clock to meet the demand for AI-related models, is a boost that isn’t going away anytime soon.
Rosenberg also attributed gold’s recent rally to global geopolitical risks and unpredictable macroeconomic outlook. “It is difficult to argue against the direction of international relations towards greater militarization, confrontation and polarization and that the hedging characteristics of the gold price have increased in importance as a result,” he said.
As gold’s steady momentum persists, Rosenberg predicts a further 15% rise, with a potential of 30%, as central banks begin to cut rates. He cites the precious metal’s historically negative correlation with gold prices.
“The reading for investors is simple: make sure you have gold in your portfolio and overweight it,” concluded Rosenberg.
USE: This article does not represent any investment advice. Consult an expert and invest at your own risk
