The gold market is on the cusp of a new phase in its bull market as central banks and governments around the world try to fight off a global depression, this according to Ronald-Peter Stoeferle, managing partner of Incrementum AG and author of the “In Gold We Trust Report”.
Stoeferle said that gold prices have room to go higher; he noted that investors remain under-allocated in gold as inflationary risks continue to grow.
Faced with near-term deflationary economic shocks, investors are still ignoring the looming long-term inflationary risks, he said.
"It's only a question of when we hit new all-time highs," he said. "Then I think we'll go to the next stage of this bull market. We'll go into this public participation phase when more people will join this party. Gold will be one of the biggest beneficiaries of a new inflation paradigm."
Stoeferle noted that in this new economic crisis, it has taken the Federal Reserve only a few weeks to pump massive capital into financial markets, something that took the central bank eight months to do during the 2008 financial crisis. He added that investors shouldn't underestimate just how much money central banks and governments are pushing into financial markets.
"It's really obvious that inflation is really around the corner because let's face it, we're seeing the most aggressive central bank policy that we have ever seen," he said. "From my point of view, gold will be one of the biggest beneficiaries of a new inflation paradigm."
As gold prices go higher, Stoeferle said that he expects the mining sector to attract more investor attention.
"Most of the mining companies really did their homework over the last couple of years," he said. "We will see a massive increase in earnings in the mining space. And I think it's going to be one of the few sectors where we're have positive visibility over the next couple of quarters."
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