Gold prices fell to a one-week low on Monday as concerns mounted that the Federal Reserve would stay the course on its aggressive pace of interest rate hikes after strong state jobs data United Friday. The precious metal has come under pressure this year, with the sharp appreciation of the dollar weighing on gold prices. While gold has traditionally been seen as a hedge against inflation and a safe haven in times of economic turmoil, a stronger dollar makes gold more expensive for non-dollar buyers, dampening demand for the dollar. precious metal. Spot gold was trading down 1% at $1,676 an ounce on Monday, near a 2.5-year low. So is it time to buy? CNBC Pro asked several market watchers what they think. “Historical bull market” For Peter Schiff of Euro Pacific Capital, the purchase of gold depends on the determination of the Fed to stifle inflation. “I think central banks are about to throw in the towel in the fight against inflation. I think inflation is going to win. We’re just getting started, inflation is going to ravage some of these great economies for years to come,” Schiff, who serves as chief economist and market strategist at the investment advisory firm, said on CNBC’s “Street Signs Asia” last week. While the US dollar may be preferred by some as a safe haven in times of economic uncertainty, Schiff instead sees the dollar as “the epicenter of the next crisis.” He thinks investors should instead “seek refuge” in gold, which has played a “unique role” throughout history as a store of value. “I think a lot of people are going to end up moving out of fiat currencies and into real money. I think we’re in the early stages of what will likely be a historic bull market in gold,” he said. -he declares. “The logical place for them is gold and to a large extent,” he added. Gold has “no guarantees” But Bart Melek, head of commodity strategy at TD Securities, said that while inflation will not be easily brought under control, the Fed is “not giving up the fight”. He thinks that could mean higher interest rates for most of 2023. Higher real rates imply a higher cost of carry for gold, due to increased competition from higher-yielding investments. Investors are therefore likely to reduce their exposure to gold, according to Melek. Hedge fund manager David Neuhauser has a similar view. “I’m a gold bull. But recent events, especially with the rising strength of the dollar, have created a huge headwind for gold. Historically, it’s done very well when rates are negative, and it does really badly when rates are high,” he said. He thinks the global economy could potentially slide into stagflation, if higher interest rates dampen economic growth while failing to keep inflation in check – a scenario he says is “really good” for the world. gold. Neuhauser, whose company holds stakes in Toronto miner Amaroq Minerals, believes gold has “stood the test of time” and “has a place” in everyone’s portfolio, especially given the current global conditions. market. “When you look at some of the valuations of some of the gold miners, they’re extremely cheap. You just can’t print gold anymore unlike a lot of other things. silver, but you can’t print gold, and there are fewer mines and even fewer new discoveries today,” he said. money in a safe jurisdiction with a very good asset is something you should be invested in today,” he added. Read More Is it time to buy the dip? These stocks look set for a big upside, Wall Street Fund manager says oil is in multi-year bull market – and names 3 stocks to cash in Goldman says these ‘cheap’ global stocks should gain in the short and long term – George Cheveley, portfolio manager at the management company Ninety One, believes that gold stocks are a long-term asset for any investor. “They’re something you keep in your wallet because when you need them they work and that’s the story of gold and gold stocks. We’ve seen it many, many times,” a- he declared. He acknowledged that gold stocks can be inherently quite volatile, but said these companies offer good long-term returns regardless of what’s happening in other markets. Price up Gold has lost about 7% of its value this year, but Cheveley believes the precious metal has managed to hold its own. “Gold prices fell slightly but did much better than most asset classes in the face of aggressive tightening and a very strong dollar,” he said. He added that he continues to see a “very strong” market for gold and gold stocks longer term. Joni Teves, precious metals strategist at UBS Investment Bank, believes gold should experience a year-end rally, with prices expected to rise through 2023 as inflation and monetary policy ease. “Once we get to the point where the tightening stops, and potentially depending on how the economic data evolves, there is room to shift back into easy mode to support any weakness in growth and that should create a more positive backdrop. for the gold,” she said. Teves has a price target of $1,800 per ounce of gold by the end of the year and expects the price of the precious metal to approach $1,900 by the end of 2023.” So bullish but not too bullish… I think the point where it gets a lot more bullish for gold is if we start thinking about quantitative easing and the economic weakness is a lot more dramatic,” she added.
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