Peter Grosskopf, CEO of Sprott Inc., said he did not think the Federal Reserve would have much ammunition left, but would continue to buy government debt to support the economy. “We believe the Fed is the subject of the latest support for the treasury market,” he said. “The key issue in the market, the major issue at all, is financial repression.” In such an environment, it is essential that investors hold gold. In his opinion, it is only a matter of time before the gold price will reach a new all-time high above that of 2011. “I think that the current environment supports gold better and that the gold thesis has been accelerated by the crisis, while gold has always been a marginal asset,” he said. “What has changed now is that absolutely more people do this as a mandatory insurance policy for what they hold in fiat currencies.”
Inflation on the horizon
Indeed, given central bank action, inflation that may be on the horizon and the uncertainties that will likely keep the market going for months, it is difficult not to be bullish on gold. With the potential renewed flare-up of the trade dispute after the end of the corona crisis and the US presidential election, new uncertainty factors are already in the starting blocks that should also support gold.