Despite recent fluctuations in the gold price, Peter Schiff, chief executive officer at Euro Pacific Capital, considers gold’s eventual climb will be $5,000 an ounce - 300% higher than the recent settlement on Comex.
Although the yellow metal now trades higher than in 2011, when its high was $1,900, Schiff's call still seems unreal, as prices registered declines last year and the year prior.
While year after year he repeated his long-running gold-price forecast which is not fulfilled yet, he is getting more upbeat now, saying that there really is no limit to how high gold prices can rise.
The view that the Federal Reserve would raise rates is a "false perception", which has been, however, pressuring the gold and supporting the dollar, he said.
The Fed hasn’t changed its stance despite the awful data in the first quarter, and it is going to be very weak in the second, he said.
The U.S. economic growth slowed to a crawl in the first quarter, with gross domestic product expanding by a meager 0.2% annual pace.
The Fed is still hinting at a near rate hike, but it won't lift rates, Schiff predicts.
“We’ll
always have to do [quantitative easing] to offset the damage from the
previous QE,” Schiff said to MarketWatch. He also argued that the Fed has made “mistakes”
and has done a “horrible job” with monetary policy.
In his view, the central bank will continue to print money and thus the gold will keep rising.
About a year ago, he made exactly the same point.
“You need to be long gold and there is going to be a huge payday,” Schiff said. “Ultimately,” gold will see $5,000 an ounce and it “could go higher.”
