Gold prices have achieved an important milestone, testing critical resistance at $1,800 an ounce, and one Australian firm is expecting that prices will continue to push higher.

In an interview with Kitco News, on the sidelines of the Mines and Money Online Connect virtual mining conference, Andrew Ballingal, founder and chief investment officer of Ballingal Investment Advisors said that he expects that gold prices will push above $2,000 an ounce this year as risks in the marketplace remain underestimated.

“We like gold because we think that it’s a very safe asset in a very dangerous world. That danger can manifest itself either in inflation or, in my view, taxation capital controls, all sorts of things,” he said. “We see this very much as the foothills, not the summit of this bull market and gold and gold mining.”

Looking at portfolio allocation, Ballingal said that investors should have at least 10% of their portfolio in gold; however, he added that he is more comfortable holding about 20% in the precious metal as part of diversified portfolio.

As bullish as Ballingal is on the raw commodity, he said that he thinks mining stocks will outperform the precious metal.

“The easiest simplest way to own gold is physically… If you, I want the biggest bang for your buck in our view, the right way to go about it is to buy a diversified portfolio of well-managed precious metals, mining companies,” he said.

As to what sector investors should be looking at, Ballingal said that mid-tier producers have the most long-term potential compared to major producers. He explained that major producers will find it difficult to maintain their current pace of production. He added that that math is against major producers.

“If you’re producing 5 million ounces of gold a year, you’ve got to replenish that. You’ve either got to find it or buy it. And on the whole, these companies showed themselves to be disastrous pro-cyclical, asset traders, rather than counter cyclical, which you need to be,” he said.

Although interest in gold mining has picked up in recent months, Ballingal said that these are still under-owned assets, which makes their potential even more attractive. However, he added that it’s only a matter of time before investor come back to the sector, attracting to growing free cashflow and dividends.“Until it’s really hurting, not to be exposed to gold or gold mine, equities, most people won’t do anything about it. That is just human nature,” he said.