Gold could reach US$3,000 per oz. in weeks after rate cuts lowered the opportunity cost of holding it, driving speculative and institutional inflows, World Gold Council senior market strategist Joseph Cavatoni said in an interview.
Western investor demand for gold could surge, driving up prices further, he said last month during the Gold Forum Americas in Colorado Springs. At press time, gold traded above US$2,640 per oz..
“Most of the price push from the West has been speculative, but the real flows will follow six to twelve months as we start to see the Western investors make allocation,” Cavatoni said.
The analyst also sees continued strong demand from central banks, particularly in response to global geopolitical tensions. Efforts to diversify reserves away from the U.S. dollar should also boost gold’s long-term appeal.
Cavatoni notes that while gold equities have lagged behind bullion, they are poised to benefit from rising gold prices, especially in a lower interest rate environment, which should enhance miners’ profitability.
Watch the full interview below with The Northern Miner’s western editor, Henry Lazenby.
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