The inflation monster is ‘out of its cage’ and the Federal Reserve must now respond. But tighter monetary policy doesn’t necessarily mean lower gold prices, says Christopher Ecclestone, Director and Mining Strategist at Hallgarten & Co. Christopher Ecclestone’s explanation of gold forecast and causes cryptocoin.com We have prepared for our readers.
“If real estate prices start to fall, investors will turn to gold”
According to Christopher Ecclestone, there is only one reason why the gold price has fallen, and that is because central banks have been pedaling softly on inflation. The strategist, who says, “This is what they have done so far,” makes the following assessment:
However, inflation continues to rise and is out of control, especially in the US and UK. Only high interest rates will keep inflation low.
Christopher Ecclestone states that in terms of inflation and its economic impact, investors who trust that the Fed can control inflation are mistaken. According to the strategist, the inflation monster has appeared and it will take a lot of effort to get it back in its cage.
Stating that this will eventually affect the real estate markets, Christopher Ecclestone states that companies that use high leverage will be especially affected, and he reminds of the massive real estate collapses in China associated with already over-expanded real estate developers. The strategist points out that if real estate prices start to fall, investors will turn to gold:
If inflation continues to rise, people will try to figure out where to invest their money. Especially if property prices stop rising or start falling. Property has been a major refuge for investors in most western economies for the past 30 years. They will look for the next sure bet.
Strategist makes ambitious gold forecast
Christopher Ecclestone notes that most investors use gold as a way of saving. “Traditionally, gold was a measure against inflation,” the strategist says.
There is a misconception that higher interest rates will affect the price of gold. Because, supposedly, people borrow money to buy gold, which is a completely false fiction. Most people use gold as a way of saving.
As a gold forecast, Christopher Ecclestone expects the price of gold to reach $2,000 next year and then rise to $3,000 in the next four years:
Gold needs to rise eventually. That’s because people don’t believe in holding in fiat money as a way to preserve the value of their assets. I wouldn’t be surprised if we see gold above the $2,000 level in the next 12 months. My five-year estimate for gold is $3,000.
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