by Bob Bryan, Business Insider:
Here’s a bold call.
After the post-Brexit, face-ripping comeback in gold prices, Christopher Wood at CLSA believes that the precious metal is set up to more than triple in price.
Since the start of 2016, gold bullion has gained 24.6%, said Wood, who has been high on gold for some time now, and the risks to the global economy and safe-haven nature of the commodity will make it the go-to investment.
“A long-term bullish view is maintained on gold bullion, with the ultimate price target now set at $4,200 an ounce,” Wood wrote in a note to clients on Tuesday.
“A long-term bullish view is maintained on gold bullion, with the
ultimate price target now set at $4,200 an ounce,” Wood wrote in
a note to clients on Tuesday.
What could possibly make gold go from
roughly $1,350 an ounce now to a historically high price?
Central banks, according to Wood. Here’s his breakdown (emphasis
“This is because the view here remains that central banks,
including most importantly the Federal Reserve, will not be able
to exit from unconventional monetary policy in a benign manner
and will remain committed to ongoing balance-sheet expansion in
one form or another. Such policies will ultimately
discredit central banks pursuing unconventional monetary policy,
threatening the stability and indeed integrity of the current
Essentially, the inability of central banks to wind down their
balance sheets and the continued effort to stimulate the economy
by admittedly unconventional means would end our current currency
system. Once this happens, we would return to some sort of gold
or physical standard, thus making gold an incredibly valuable
asset and sending it soaring.
Please follow SGT Report on Twitter & help share the message.