Asset Strategies International: What Would It Take for Gold to Reach $3,000?

Gold prices have held up well over the past few years. The metal has even made a new record-high price in dollars in the past year. Geopolitical tensions and resilient inflation are keeping the metal priced near $2,000 per ounce.

The next year could see the metal trend even higher. That’s due to several factors that continue to play that are leading to higher demand for gold.

Currently, interest rates are at their highest level in 15 years. Markets expect the Federal Reserve to cut interest rates later this year.

Lower interest rates mean a lower cost of capital. That could keep the economy growing. But it could also keep inflation higher.

That scenario is likely good for gold and other precious metals.

Another factor at play is the ongoing buying by central banks. Typically, central banks diversify their holdings with a number of other country’s currencies.

The past few years have seen strong demand for gold. Given how many countries have devalued their currencies in recent years, that looks like a strong hedge.

Governments will likely have no choice but to keep printing. In the United States alone, trillion-dollar deficits have become the norm. And the rising costs of financing that debt make money printing look more attractive.

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