Peter Schiff, an economist and known gold aficionado, believes that the current price rally gold is experiencing will spill over into the future, surprising stock traders. Schiff claimed that gold stocks were the new tech stocks and that Wall Street’s indifference to them would lead to a massive market capitulation.
Peter Schiff warns about Gold Rally: ‘It’s real’
Peter Schiff, chief economist at Europac and Gold Permabull, believes that a brewing bull market in gold will drive the precious metal to even higher prices than it was. Motivated by the recent breakout that led gold prices to break the $2,000 mark on April 4, Schiff fixed:
Senior miners still need to rise more than 20% and junior miners more than 25% to hit new 52-week highs. The divergence is due to negative sentiment. Investors still don’t believe the rally is real. It is real and it will be spectacular.
Schiff had warned of this breakout before, also stating that other inflation hedges, including Bitcoin, would shrink with precious metals rising in price. Schiff also described gold stocks as the new technology stocks, warning investors to “prepare for this new reality or suffer the consequences”.
‘The capitulation will be epic’
Schiff details the dynamics gold and gold-related stocks face in the Wall Street markets, often ignored by investors who prefer other alternatives. He believes that Wall Street has a bearish bias on gold-related stocks that will hurt him in the long run. He declared:
When gold prices are low, they don’t want to buy gold shares because they think gold prices will fall further. When gold prices are high, they don’t want to buy gold shares because they expect the prices to sell off. The capitulation will be epic.
Several analysts have tried to explain the gold price rush that the market is currently facing. On March 18, TD Securities global head of commodity strategy Bart Melek said that the expected upcoming dovish policies from the US Federal Reserve were beneficial to gold prices.
In the same way, Jan van Eck, CEO of the investment management firm Vaneck, established a relationship between the phasing out of the US Federal Reserve’s tightening policies and the growth of interest in gold and bitcoin. “We are at the beginning of what could be a multi-year cycle in gold, and I put bitcoin in that category as well,” he said in an interview with CNBC on March 27.
What do you think of Peter Schiff and his predictions for the gold market? Tell us in the comment section below.
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