Don’t be fooled by the recent run of new all-time highs – gold still has a long way to go and more price highs are on the way, meaning now is the time to buy. Famed economist David Rosenberg says that gold prices are nowhere near the highs they’re on course to reach. He urges investors to buy as much as they can right now, before additional gold rushes push the precious metal out of reach.
Writing in a report issued by his company, Rosenberg Research, Rosenberg advised investors to go hard on gold, even at the current all-time high price levels. “Any well-diversified portfolio should contain gold, and, at present, we’d recommend an aggressive overweight,” he explained. “That will act as a hedge against geopolitical and fiscal risks, offer a safe harbour against a breakdown in the equity bull-run, and give positive exposure to the coming easing cycle and period of dollar weakness. Don’t be afraid to go in at current levels.”
If that doesn’t sound like sound advice, consider this; Rosenberg Research’s price projects call for gold to surpass £1,970 ($2,500) with £2,364 ($3,000) also within reach.
The firm says a combination of safe-haven demand, interest rate cuts and central bank demand are all supportive of higher gold prices. Should the U.S. lapse into recession, the gains could be event greater.
Rosenberg added, “Any further deterioration in the global geopolitical situation would be positive for gold. Deteriorations in financial conditions, in addition to the impact of interest rates (such as higher spreads driven by rising corporate defaults) would spur on gold, too. Finally, repeated and increasingly dire warnings over the fragile state of the U.S. fiscal position can only support gold.
“Putting those observations together with our modelling exercise tells us that downside risk to the gold price is limited, but there is a lot more room to rise.”
