Juerg Kiener, managing director and chief investment officer at Swiss Asia Capital, said gold could rise to $4,000 an ounce by 2023 as rising interest rates and recession fears keep the market volatile.
Kiener told CNBC that the price of the precious metal could reach between $2,500 and $4,000 next year. “Asian street signs” on Wednesday.
The gold market is likely to see a big move, he said, adding that “it’s not going to be just 10% or 20%,” but a move that will “really create new levels.” new high”.
Kiener explained that many economies could face “a bit of a recession” in the first quarter, which would lead to many central banks slowing down the pace of interest rate hikes and making gold immediately worthless. more attractive. Gold is also the only asset that every central bank owns, he said.
According to the World Gold Council, central banks have bought 400 tons of gold in the third quarternearly doubled from the previous record of 241 tonnes in the same period in 2018.
“Are from [the] 2000s, average profit [on] gold in any currency is somewhere between 8% and 10% a year. You haven’t gotten there yet in the bond market. You didn’t get there in the stock market.”
Kiener also said investors will look to gold amid high inflation in many parts of the world. “Gold is a very good hedge against inflation, a great product in times of stagnant inflation, and a great addition to a portfolio.”
Despite strong gold demand, Kenny Polcari, senior market strategist at Slatestone Wealth, disagrees that prices could more than double next year.
“I don’t have a $4,000 price target for it, although I would love to see it get there,” he said on CNBC’s “Street Signs Asia” on Thursday.
Polcari argues that gold prices will see some pullback and resistance at $1,900/oz. He said prices will be determined by how inflation responds to rising interest rates globally.
“I like gold. I’ve always liked gold,” he said. “Gold should be part of your portfolio. I think it will do better, but I don’t have a $4,000 price target for it.”
Gold rises on Tuesday as US dollar weakens after Bank of Japan adjusted yield curve control policy. Notice caused Gold price up 1% above key level $1800before falling on Wednesday as the dollar recovers.
China is a big buyer
When asked if the low supply is due to high demand, Kiener of Swiss Asia Capital said “there is always a supply, but maybe not at the price you want.”
But the high prices don’t suit buyers in China, who are paying a premium for the precious metal, he said.
Earlier this month, China’s central bank announced it had added about $1.8 billion in gold to its reserves, bringing the cumulative value to about $112 billion. Reuters reported.
He added: “Asia is a big buyer. And if you look at the whole transaction, basically gold is leaving the West and it’s going to Asia.”
Advice for investors
Nikhil Kamath, co-founder of India’s largest brokerage Zerodha, said investors should allocate 10% to 20% of their portfolio to gold, adding that it is a “strategy”. appropriate strategy” until 2023.
“Gold is also traditionally inversely proportional to inflation and it is a good hedge against inflation,” Kamath told CNBC on Wednesday.
“If you look at the amount of gold you needed to buy an average home in the 70s, you probably needed the same amount or less of it today than you did in the 70s, 80s or 90s,” he added. .
