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BookmarkGold dropped to a one-month low Monday, but that move will amount to a drop in the bucket if the forecast of James Rickards, portfolio manager at West Shore Funds, proves to be correct.
He sees the precious metal rising to $7,000 to $9,000 an ounce in the next three to five years. June gold futures settled at $1,311.10 on the Comex Monday, down $24.90 from Friday.
Fundamentals will push gold higher, Rickards told Yahoo. He expects a crash in the stock market. “This looks like another asset bubble,” Rickards said. The Standard & Poor’s 500 Index stands less than 2 percent from its record high.
Gold will also benefit from a “collapse of confidence in paper currencies,” Rickards said.
Meanwhile, the floating supply of gold has dropped, which also will boost prices, he said. During gold’s 28 percent drop last year, 500 tons of gold from the SPDR Gold Shares exchange-traded fund was dumped on the market, Rickards said.
Most of that gold went to China, which is storing it, he said. “That gold’s not going to see the light of day for 300 years.”
Some investors turned negative on the metal after Federal Reserve Chair Janet Yellen indicated last week that the Fed might raise interest rates sooner than some had expected.
“People don’t want gold in a rising interest-rate environment,” David Meger, director of metal trading at Vision Financial Markets, told Bloomberg. “While concerns about Crimea remain, there has been no escalation in violence for people to jump back into the safe-haven asset.”
