John Hathaway of Tocqueville Asset Management says gold is set to hit record highs on the persistence of a negative interest rate regime.
Writing for King World News the precious metals expert notes that although gold is likely to suffer a pullback in the short-term it will be pushed to new highs by negative real interest rates.
What are the fundamentals that will drive gold to new highs? We believe it all starts with negative real interest rates. Negative real rates are the universal source of dissatisfaction and potential mayhem in the capital markets. They drive capital to seek alternatives to what would otherwise be regarded as safe havens for liquid assets and in the process misprice both safety and risk. Real interest rates at 4% in 90 day Treasuries would represent a significant headwind for gold.