Goel warned that the recent increase in precious metals has all signs of a “reflationary bubble of gigantic proportions”, and investors should prepare for a major drawback in the coming months.
Gold prices have reached several peaks of all time this year, currently oscillating near the $ 4,000 mark, while Silver approached the $ 50 level.
“It is the craziest party that we have seen in precious metals for a very long time,” Goel said in an interview with CNBC-TV18. “In the past 40 years, there have been only two episodes of this type where gold and silver behaved very well, and the dollar index was soft or lowered. In both cases, gold and silver have corrected a lot after that.” Goel thinks that these key psychological landmarks could mark the last stage of the rally. “I believe that there is a high probability that these two monuments be made in the coming days or perhaps a few weeks,” he said, adding that the following could be an aggressive wave of sales.
“In this case, you can expect a correction of 30 to 35% in gold,” warned Goel, citing similar episodes in 2007-2008 and 2011 when gold prices dropped up to 45% after major gatherings. “I think it will probably be about a year of correction.
The strategist sees the gold fall at around $ 2,600 to $ 2,700 before it becomes attractive again. “At this level, gold will again be the best investment in the world,” he said. However, he gave a more prudent tone on money, warning that his long -term perspectives could weaken as a worldwide slowdown takes place.
“I see a deep recession in the world led by the United States over the next two to three years. In this case, the demand for money, for the first time in a decade, will lower it,” said Goel, adding that even the industrial demand of the sectors such as photovoltaics, semiconductors and electric vehicles may not compensate for the impact of economic contraction.
Although short -term gatherings can continue, Goel thinks that the current trend in precious metals is not durable. “A regime change must occur,” he said, reiterating his point of view that investors should prepare for a deep correction before gold presents itself again as a convincing long-term purchase.
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