High inflation could push gold prices to historic highs

Gold prices are facing a positive outlook as economic and geopolitical factors continue to support the precious metal's upward momentum. In an interview with Kitco News, Dr. Nomi Prins - geo-economic expert, author of the book "Permanent Distortion: How Financial Markets Abandoned the Real Economy Forever" - gave an optimistic assessment of the trend of gold.

Prins believes that gold prices are likely to rise sharply in 2025, with an expected peak of up to $4,000 an ounce. According to her, demand for gold from central banks around the world is one of the main factors driving the increase.

“Gold is a physical asset and is outside the control of any financial or monetary system established by humans. You cannot print or create it,” she stressed.

As the global economy faces many uncertainties, central banks have increased their gold purchases to protect assets against risks such as inflation and rising public debt.

In addition to its role as a hedge against inflation, gold is also seen as a safe haven during economic and geopolitical turmoil. Prins noted that while global inflation has shown signs of cooling, consumers are still under pressure from rising prices for essential goods such as food, housing and healthcare.

“Gold prices could reach new highs before facing a correction. Central banks and large investors are taking advantage of every dip to continue buying,” Prins said.

Despite her impressive bullish outlook for Bitcoin in 2024, Prins remains skeptical about the cryptocurrency's ability to replace gold. She believes that Bitcoin is not suitable as a long-term strategic asset due to its high volatility and failure to address core issues such as inflation and public debt.

“Bitcoin is not a real solution to the growing debt problem or the need to develop a strategy in the US to fight real inflation,” Prins said.

Prins advises investors to focus on the long term and not panic about short-term market fluctuations. “This will be a volatile year. However, investors who are patient and have a long-term view will benefit from the stability and value of gold,” she said.

With this optimistic outlook, gold continues to assert its role as an important asset in the portfolios of global investors, especially during times of economic uncertainty.

Also sharing on Kitco News, Kevin Grady - President of Phoenix Futures and Options said that there are many supporting factors for prices to continue to increase: "I think the market has held some important levels. There are investors ready to buy when prices fall.

What pushed the price down was some weak investors or uncertain long positions, which scared them out of the market. But I think stronger investors, like central banks, came in and they kept buying."

Grady is bullish on the precious metal through 2025: “I think gold will hit $3,000 this year. The only issue is how the tariffs play out.”

However, Grady said it was difficult to predict where gold prices would go in the short term. “It’s hard to say where the price will go, but I still think there are strong investors in the market. Any dip in the price will be taken advantage of by them to buy,” he said.