"The world has a monetary problem," said Keith Weiner of Monetary Metals. "Gold is going to be the path out."
Keith Weiner: Gold Has Many Buyers, "Forced Selling" is the Problemyoutu.be
With gold demand looking strong, why has the yellow metal declined in 2022? According to Keith Weiner, founder and CEO of Monetary Metals, "forced selling" is putting pressure on the precious metal's price.
"A lot of people are buying gold for all the right reasons, but at the same time, there's a lot of forced selling of gold. (We're seeing) margin calls — and not necessarily on the gold part of the portfolio's leverage. There's margin calls on other parts of the portfolio, where these assets are illiquid and can't be sold easily," he explained to the Investing News Network.
"(When that happens), you sell the thing that isn't nailed down — that's gold," Weiner added.
While that might sound discouraging, he emphasized that it's only a matter of time before gold's fortune changes.
"When that selling pressure abates — because I think that's a finite path that we have to go through — I don't think the buying pressure is going to abate, only the selling pressure," Weiner said.
Like many market watchers, Weiner thinks that the US Federal Reserve will eventually have to stop hiking interest rates and pivot. That's the point at which he thinks prices for both gold and silver could break out.
"The prices have gone down probably about as much as they're going to, and then as soon as the pivot happens I think there's going to be a huge bid in the market as everyone says, 'Okay, the Fed is back to easing, back to printing,'" he said. "And then I think you could easily see gold at US$1,900 to US$2,000 (per ounce) and silver at US$24 to US$27 (per ounce)."
It's difficult to say when that will happen, but Weiner emphasized that it's important for investors to be prepared ahead of time. "The world has a monetary problem," he said. "Gold is going to be the path out."
Watch the interview above for more from Weiner on gold and its sister metal silver. You can also click here to read our recap of the New Orleans Investment Conference and here for our full event playlist on YouTube.
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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.