The expert does not attach much importance to the plans of the US Federal Reserve to raise interest rates in two years.
"Government spending and global debt will force central banks to keep interest rates at the lowest possible level for as long as possible," Grosskopf said. According to him, the recent decline in the price of gold should be viewed as a chance for long-term investors to increase their positions in the precious metal. “What we are seeing now in the gold market is the flight of short-term money. In general, the long-term positive picture for the precious metal has not changed. It will only get better. We believe that every drawdown will be bought out by long-term investors, ”the expert voiced this opinion in a recent interview.
According to the analyst, the most important argument in favor of gold is the risk of rising inflation. He assumes that the US Federal Reserve will not only be forced to keep interest rates low, but it will also underestimate the pressure on consumer prices. Moreover, budget expenditures and measures of financial support for the population directly affect the acceleration of inflation. Many companies will be forced to raise payroll costs to attract good talent, and this will again be reflected in higher consumer prices.
However, Grosskopf expects not only inflation to rise in the United States, but also a higher likelihood that the American and global economies will weaken significantly by the end of this 2021. Of course, since the beginning of this year, there has been economic growth thanks to a low base due to last year, when quarantine restrictions were in effect, but now the rate of consumption is weakening, which indicates an unstable development of the situation in the economy.