Gold prices are expected to shrug off a pullback after a rally last week that peaked at a multi-year high as investors anticipate financial markets collapsing like a sand pile by the end of the year, a global investment strategist said.
David Roche, president and global strategist at London-based Independent Strategy, said spot prices could rally to $2,000 by the end of the year after crossing the significant $1,400 level last week. Gold futures also rose to their highest in six years.
Listen to GHOGH with Jamarlin Martin | Episode 18: Dr Boyce Watkins
Jamarlin talks with Dr. Boyce Watkins about the lopsided relationship between the Democratic Party and Black America. They discuss potential 2020 presidential candidates, Sen. Cory Booker and Sen. Kamala Harris, and whether corporations and interests connected to foreign countries have more influence than Black voters on policy and priorities.
Gold, seen as a safe-haven asset for fearful investors, is expected to gain from a confluence of economic and geopolitical events that could weaken the dollar.
This includes high possibilities that the Fed and the European Central Bank would start easing their policies to counter a global economic slowdown.
“I actually believe financial markets are now poised to crumble like a sand pile,” Roche told CNBC’s Squawk Box.
“I think the trade conflict with the United States is a much far, wider-reaching, global conflict, which will undermine growth expectations in equity markets,” he added.
The gold futures hit a high of $1,442.9 last week — the highest since May 2013 — before paring some gains on the back of profit-taking. Gold is up 9 percent so far this month, coming near to the best monthly performance of 10.57 percent in February 2016.