During the previous phase of the rise in gold prices, which lasted until September 2011, the US Central Bank increased its balance sheet to enormous proportions. And now, against the backdrop of combating the consequences of the coronavirus, the Fed has removed all restrictions on the purchase of securities and printing money, only to save the US economy from the crisis. This has never happened in history. This is an unprecedented event.
Holmes takes this fact as the basis for his forecast for gold. In an interview with Kitco News, he said: “If we look at past years, then from 2008 to 2011. the cost of gold rose from $ 750 to $ 1900 per ounce. If we extrapolate the past period to the current situation, then in the case of repeating cycles, the price of gold can rise to $ 4000 per ounce. "
He also pointed out that between 1987 and 2006, when the head of the Fed was Alan Greenspan, the balance of his department was 6% of US GDP. But now this figure is 33%. “And now Jar Powell needs to print even more money to save the country's economy from the effects of quarantine. Under these conditions, investors will be increasingly interested in real physical assets, which also include yellow precious metals, which means its value will continue to grow.