Gold has seen some strong gains so far this year with prices holding above $1,700 an ounce, but it’s not too late to get into the market, which currently has unlimited potential, said Mike McGlone, senior commodity strategist at Bloomberg Intelligence.
“As far as how high [gold] can go, it’s supposed to get to a period where it gets stupid expensive like the stock market did for a little while last few years,” he said. “Stock market’s been boosted by this massive amount of liquidity, but the question is how much longer that can last. I think gold has the upper hand.”
McGlone said that gold is just embarking on its bull run and expects the ratio between the yellow metal and equities to hit parity. He added that gold prices could push to $2,800 an ounce, to be in line with a 1:1 ratio with equities markets.✕Skip in 5
Price action in the oil market highlights major problems in the global economy, McGlone said. He added that the world is seeing massive demand destruction which will lead to an economic depression and ultimately, higher gold prices.
“From a gold standpoint, [low oil prices are] fuel for higher gold because it gives fuel for central banks to ease more,” he said.
Unlimited amounts of cash from central banks used to combat the impending depression will ultimately lead to currency debasement, McGlone said. Unlike U.S. dollars, he noted that gold has a limited supply.