Kitco.com – Gold is still undervalued at $2,000, will hit $2,400 next year – IG Wealth Management’s Petursson

Nov 18, 2023

https://www.kitco.com/news/2023-11-09/Gold-is-still-undervalued-at-2-000-prices-will-hit-2-400-next-year-IG-Wealth-Management-s-Petursson.html

Ernest Hoffman Thursday November 09, 2023 15:48

(Kitco News) – Gold prices have been held back by the strength of the U.S. dollar in 2023, but the yellow metal could be poised for a big breakout in the near future, according to Philip Petursson, Chief Investment Strategist at IG Wealth Management.

In a recent interview with BNN Bloomberg, Petursson said that even at $2,000 per ounce, gold has considerable upside, and the coming year should see prices appreciate significantly.

“Gold has been weighed down by the strength and the U.S. dollar for most of this year,” Petursson said. “They tend to be inversely correlated, so as U.S. dollar strengthens gold tends to weaken a little bit. Now, if we think that the U.S. dollar is going to soften from here, and I think that is our base case going into 2024, that’s positive for gold.”

Petursson said IG believes gold is undervalued by as much as 20%. “Once it catches this bid and breaks through, solidly breaks through $2,000, we think it can go higher to potentially $2,400.”

IG Wealth Management expects this bullish scenario to play out even if bond yields remain at multi-decade highs, and they also expect the U.S. economy to pull off a soft landing and avoid recession.

“As we think about the balance of 2023 and as we consider 2024, we remain of the view that higher bond yields will continue to create some volatility within the equity markets,” Petursson said in their 2023 third quarter market review.

“However, our economic view is still toward a soft-landing scenario in the United States, and that does lead to a more cautiously optimistic view for equities over the next 12 months,” he said. “In the meantime, fixed income investors will enjoy the benefit of higher interest rates overall.”