Mark O'Byrne, director of research at Ireland's GoldCore Ltd., predicts gold prices will hit an all-time record high most likely within the next 12 to 18 months, in an interview with Bloomberg TV.
In the medium-to-long term, gold fundamentals are sound, O'Byrne said, adding it's always best to focus on that outlook.
Gold has actually risen the last three weeks consecutively, he said, noting it will be interesting to see if Cyprus marks the bottom of gold's recent weakness. The recent weakness has primarily been in dollar terms because the dollar has been strengthening in the last month or two months.
In Japanese yen terms gold is up 4.5% year-to-date and in UK sterling terms it us up 2.5%. That suggests the demise of gold, and the death of the bull market, is greatly exaggerated.
Diversification is fundamental and people need to focus on gold's value rather than solely it's price, he said. Gold's value is a proven safe-haven diversification, both throughout history and in the recent few years of academic research.
GoldCore is sticking by its call that the gold price will hit $2,400 per ounce, which is the inflation-adjusted record high, although O'Byrne conceded it has been saying that since 2003. In the course of any bull market, the company expects any asset class, whether equity or commodity, to reach and surpass the inflation-adjusted high.
In Jan. 1980, gold's nominal high was $850 per ounce, O'Byrne said, and in inflation-adjusted terms, that's $2,400 per ounce.
While he said this price rise could happen at any time — in one, two or three years — he believes it will likely happen in 12 to 18 months.
But there are no guarantees and people should not be buying to simply make the capital gains since it's more about hedging and diversification.
Watch the complete interview:
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