Adrian Day of Adrian Day Asset Management said he wouldn’t be surprised to see the gold price reach a new all-time high this year.
At this year’s Prospectors & Developers Association of Canada convention, Adrian Day suggested gold could hit US$1,750 per ounce by year end. With that milestone reached, what’s next?
“I’m certainly not going to hope that gold doesn’t go any higher just so I can be correct,” he said during a video interview. “It’s definitely going to go higher in my view.”
How much higher depends on the evolution of many different factors. “Looking at where we are now … I would say (gold will go) meaningfully higher. I wouldn’t be at all surprised if we had new highs — new all-time highs — this year,” added Day, who is president of Adrian Day Asset Management.
Looking at next year, he suggested that US$2,000 or US$2,200 would be “relatively conservative” estimates. “I’m very, very bullish, very bullish on gold,” Day commented.
His positive outlook for gold is connected to the monetary policy being pursued by the US Federal Reserve and other central banks around the world.
“All central banks, pretty much every central bank around the world, is pursuing this QE (quantitative easing) infinity, and that is exceptionally bullish for gold, because it’s basically a sign from the central banks that they’re defeated,” Day explained.
“The central bankers in my mind have absolutely no idea how they’re going to get out of this, and I don’t think … (they) even have a subcommittee somewhere considering what happens when.”
He did remind investors that although it might seem like it, a bad economy is not generally good for gold — it’s crisis situations, which tend to come with a bad economy, that are good for the yellow metal.
“I would say that a bad economy, a recession, is not good for gold, because people need money to buy gold,” Day said. “What is good for gold is a crisis situation. So if you have a monetary crisis, which often comes with a weak economy, then that is good for gold. But it’s not the bad economy that’s causing people to buy gold; it’s the monetary crisis and the uncertainty that’s causing people to buy gold.”
Watch the interview above for more from Day on gold and global economy. You can also click here to watch part two of the interview, which focuses on strategies for investors in the current market.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.