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Last week’s surprisingly hawkish tone from the Federal Reserve may have driven the speculative hot money out of the market. Still, the CEO of one of the largest precious metals firms in the world said that gold’s long-term potential remains firmly intact.
“What we have seen is a lot of short-term money move out of the market,” he said. “The long-term picture for gold hasn’t changed at all; it just gets more and more compelling. We think these fear-driven dips should be bought.”
Government support and rising unemployment benefits are forcing companies to raise wages to attract workers. This, in turn, will lead to higher input costs, which will be passed on to consumers.
Grosskopf pointed to slowing growth in the housing sector as a sign of how fast the economy can cool down from the current pace. Even if the Federal Reserve does start to raise interest rates in two years, Grosskopf said that rising inflation will keep real rates in negative territory.
“Can gold prices move $250 to the upside in a few months? Sure, it can. We have seen that happen many times before,” he said. “When you look around, everything’s at a record. We are at peak equity markets, peak debt, the Fed’s balance sheet is at a record. that pendulum has absolutely swung as far as it possibly can. That is why the gold market is so compelling right now.”
Comment: To kill the boredom with PMs shop around the steel sector for a while, lots of green over there. MC
P.S. Ammo is like money, POWW OLN VSTO and SWBI Smith & Wesson to shoot it away at the range, are all flying 200% to 500% in a month. CORRECTION IN ONE YEAR, not one month. Put all 4 tickers on one chart.