Gold’s Safe-Haven Rally 'Not Sustainable’ Says CEO

KITCO NEWS -- After rallying last week, gold prices have settled slightly lower this Monday morning as the U.S. dollar posted gains, but one CEO says he is not too phased by it. ‘It’s the normal DNA of gold to go plus or minus 20 percent,’ U.S. Global Investor’s chief Frank Holmes told Kitco News. ‘Saying it can fall below $1000 is nothing really special. It can also jump $200,’ he adds. February comex gold futures managed to break above the key $1,100 an ounce level last week and managed to settle a little below that level Monday afternoon. However, with regards to the safe-haven bid gold got last week, Holmes says it may not last. The ongoing geopolitical events from North Korea and the Middle East, as well as economic woes in China, have triggered gold to rise, ‘but it’s not sustainable,’ he said. According to Holmes, gold’s biggest threat this year will be lower physical demand from China and the Middle East, due to weaker oil prices as well as economic weakness in the regions. Holmes also commented on palladium prices, which have managed to start off the year on a weaker tone, falling roughly 12%. ‘I don’t think it is a buy now because we have to get China PMI to turn positive,’ he said, adding that as global economies continue to struggle so will industrial metals like palladium.