After finishing off 2013 in negative territory, gold has started 2014 with a bang and has jumped 14 percent so far. After hitting a six-month high during Monday’s trading session, Peter Schiff, president of Euro Pacific Capital, says the rally is going to last and the precious metal will likely hit $1,500 in the near future.
Speaking in an interview with Yahoo! Finance this week, Schiff predicted that the next stop for gold is $1,420 and when it happens then $1,500 will be the next threshold to meet. During the Tuesday morning trading session, gold futures were around $1,360.
Financial experts are unsure what to attribute to gold’s rise. Some have begun to point to the situation in Ukraine as the reason why the yellow metal has been gaining. However, Schiff says that’s not the case.
“You still have a lot of shorts in market, I think a lot of the selling is coming from people selling gold that they don’t even own,” said Schiff, who added that those who have to cover their shorts will realize how expensive it’ll be to acquire back the precious metals.
“I think it’s amazing that people are still so negative on [gold’s] rally. Right now people are saying gold is going up because of the situation in Crimea. I think it’s got nothing to do with Crimea. Gold is not going up any faster since the Russians moved into Crimea than before.”
Instead, gold prices are going up again because of inflation, a topic that Schiff has been promoting since the economic collapse in 2007 and 2008. Although government data suggests otherwise, Schiff believes the Federal Reserve will reverse its tapering of the quantitative easing program and pump more money into the system.
“The fed has no way out of QE, the U.S. economy is slipping into back into recession,” said Schiff. “More people are starting to realize that, and accept the fact that the Fed is going to ramp up QE, not continue to taper; all of that is very bullish for gold.”
Schiff has forecasted for quite some time now that gold will rise to $5,000 per ounce – silver would hit $250.