Why Gold Will Hit $3,000 in 2 Years: Strategist
Gold prices continue to hit new highs this week and investors are wondering how much more room it has to run. David Tice, bear market strategist at Federated Investors, offered his outlook for the commodity.
“Gold could certainly have a pullback—it’s getting very overbought,” Tice told CNBC. But that would be only temporary, in his view.
“The emerging markets generating all the free reserves only have 2.2 percent of the reserves in gold, where the developed countries have 38 percent. If [the emerging markets] increase their percent to 5 percentage points, gold could go to $2,000 to $2,500 easily,” he explained.
Tice said if people buy gold today, they will be “very happy” two years from now as he expects prices to reach $3,000.
“Fear is going to be key—there will be a global currency disaster ahead,” said Tice. “We can certainly see some inflation…[But] if the economy really grows like it is now—then prices can go up around the world and gold can go up as well.”
- Watch Tice's Latest Appearance on CNBC (Aug. 12, 2009)
- Counterpoint: Sidestep Gold and Head for Oil
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No immediate information was available for Tice or his firm.