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General Market Commentary
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General Precious Metals
Gold is the ‘real bitcoin’: Trader sees new highs ahead for the metal
Gold topped $1,800 on Wednesday, marking a nearly nine-year high.
Its rally may not be over yet, according to Boris Schlossberg, managing director of FX strategy at BK Asset Management.
“I guess gold is the real bitcoin,” Schlossberg joked on CNBC’s “Trading Nation” on Wednesday. “Ultimately I think what’s happening is the market is taking implicit bets that inflation is starting to pick itself back up, and I think there’s a really good reason why the market thinks so.”
Schlossberg said stimulus from global central banks that has fueled a fiscal expansion is going to make its way into the economy and drive inflation higher. This, then, will encourage central banks to hold rates low.
“Central banks are still going to have to keep rates very, very low, because their first and foremost priority right now in a post-Covid world is to maintain momentum, to maintain expansion as much as possible,” said Schlossberg. “So they’ll suppress interest rates, inflation will go a little bit higher, and of course gold loves nothing more than real interest rates going lower and lower and lower.”
He added that this environment is setting gold up to test its $1,920.30 all-time high set in 2011.