1st American Reserve Blog

Wells Fargo Bank issued a report on Real Assets, in May, where their Head of Asset Strategy, John LaForge, predicts gold will “test its all-time highs” going forward. As the best investment metal on the market, gold has been on the rise and previous predictions of $1,700 have turned into even higher numbers, according to Dr. Mike Fuljenz, numismatic consultant for 1st American Reserve in Beaumont, TX. As for LaForge and Wells Fargo, the prediction is that gold will once-again hit its all-time high of $1,900 by the end of the year. “Gold has a host of economic and market factors working in its favor, and we are increasingly confident that gold could test its all-time high of $1,900 this year,” LaForge stated, and Wells Fargo has already upgraded its year-end 2020 gold target price three times in 2020 and now sees this new all-time high above $1,900. LaForge explains that “gold has a host of economic and market factors working in its favor. Of course, the increased volatility in 2020 is one. Gold’s prime macro driver, though, continues to be the direction and level of global interest rates, and their persistent flirtation with the negative. Since 2016, gold has increasingly been used by investors as a hedge against the unknown impacts of sinking, and persistently low, long-term interest rates. Recent global injections of money by central banks (quantitative easing, or QE), in reaction to the coronavirus’ economic effects, has only added fuel to this hedge. “Gold is also being used by investors as a substitute for long-term bonds as a perceived ‘safe asset,’” LaForge stated. “With no particular ties to a government or other bond issuer, we believe gold looks attractive to long-term investors. The bottom line is that we continue to like gold as part of a well-diversified portfolio, particularly in light of additional global QE, and persistently low and falling long-term interest rates.”