According to investment management firm Goehring & Rozencwajg, central banks, particularly in emerging economies, are increasing their gold reserves in anticipation of a forthcoming monetary regime shift. This move indicates a potential decline in the reserve currency status of the U.S. dollar. Leigh Goehring, the managing partner of the company, recently stated in an interview that gold will play a vital role as a settlement mechanism in the new financial landscape.
Goehring & Rozencwajg Anticipates Gold Surpassing $2,000 due to Central Bank Interest
As of June 21, 2023, digital currency markets have experienced a 6.98% increase in the last 24 hours, while the precious metal markets have shown lackluster performance. Gold is currently hovering slightly above $1,930, with silver trading under $23. Leigh Goehring, a partner at Goehring & Rozencwajg, believes that gold could reach a price range of $2,100 per unit within this year. In an interview with Kitco News, Goehring shared his forecast, emphasizing the emergence of a new monetary regime where gold will play a crucial role in the revised set of rules and monetary practices.
Leigh Goehring, a partner at Goehring & Rozencwajg, expressed the firm’s optimistic outlook on gold in light of the evolving financial order. He highlighted that emerging economies are actively accumulating significant gold reserves through their central banks. Moreover, he noted the potential global loss of reserve currency status for the U.S. dollar, which could have substantial consequences. Goehring & Rozencwajg’s managing partner stated, “The U.S. dollar might be on the verge of losing its reserve currency status, which would be the most significant market shock in the past four decades.”
On June 21, 2023, the price of gold per ounce against the U.S. dollar.
Goehring pointed out that central banks, particularly in emerging economies like China, India, and Turkey, have been steadily increasing their gold reserves. Purchases of gold by central banks reached record-breaking levels in the last quarter of the previous year. The executive believes that this assertive buying will potentially drive the price above $2,000 per ounce and contribute to the monetary regime shift. Goehring emphasized the certainty of his prediction, stating during the Kitco interview:
“We will surpass the previous resistance level of $2,000 per ounce. The central bank buying will serve as a significant catalyst.”
Goehring stressed that a monetary regime change is likely to occur within this decade and firmly believes that gold and other valuable commodities will be used for settlements. “The monetary regime changes in 1930, 1968, and 1998 were highly influential in commodity price movements, and we expect the monetary regime change in this decade to follow suit,” explained Goehring.
This viewpoint resonates with other investors who foresee a meteoric rise in gold’s value. Rick Rule, the founder of Rule Investment Media, is confident that gold will experience a substantial price surge in 2023, while prominent investment bank UBS predicts that gold will reach an all-time high this year. Goehring also suggested that if gold were to become the ultimate settlement tool in the new financial order, it could help rectify capital imbalances.
“The idea of undermining the dollar’s reserve status, settling transactions in local currencies, and potentially resolving capital imbalances through gold is intriguing,” stated the executive from Goehring & Rozencwajg, an investment management firm, during the financial news publication.
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Frequently Asked Questions (FAQs) about gold investment
What is the prediction of the investment management firm regarding gold’s role in the new financial order?
The investment management firm, Goehring & Rozencwajg, predicts that gold will play a crucial role as a settlement mechanism in the new financial order.
Why are central banks increasing their gold reserves?
Central banks, especially those in emerging economies like China, India, and Turkey, are increasing their gold reserves in preparation for a forthcoming monetary regime shift.
What potential impact does central bank demand have on the trajectory of gold?
Central bank demand for gold has the potential to propel its price above $2,000 per ounce and contribute to a shift in the monetary regime, according to Goehring & Rozencwajg.
What is the view of Goehring & Rozencwajg regarding the reserve currency status of the U.S. dollar?
Goehring & Rozencwajg’s managing partner believes that the U.S. dollar might be on the verge of losing its reserve currency status, which would be a significant market shock with far-reaching consequences.
Yes, other investors, such as Rick Rule and UBS, also anticipate a substantial rise in gold’s value, with Rule confident in a significant price surge in 2023 and UBS predicting an all-time high for gold this year.
How does Goehring envision gold’s role in resolving capital imbalances?
Goehring suggests that if gold becomes the ultimate settlement tool within the new financial order, it could potentially help rectify capital imbalances, offering an intriguing possibility for addressing such issues.