Gold continues to shine. The yellow metal recently rose above the $2,500 mark, and industry leaders have expressed strong confidence in the ongoing bull market.
In an exclusive interview with Investing.com, Alamos Gold (NYSE:) CEO John McCluskey confirmed that the precious metal is still in a “very strong bull phase,” underscoring the strategic opportunities ahead for investors.
Why the gold price is reaching record levels
The rise in gold prices to record levels in recent weeks has been driven by a confluence of economic factors and investor sentiment. One of the main factors behind this upward momentum is the increasing expectation of interest rate cuts by the Federal Reserve. Last week, Fed Chairman Powell said at the Jackson Hole Symposium that “the time has come for policy adjustment.”
The prospect of interest rate cuts has fueled demand, pushing gold prices higher.
Furthermore, the weakening of the US dollar, often correlated with expectations of lower interest rates, has further supported gold’s rise, while fears of a global economic slowdown have also contributed to gold’s appeal.
In a recent note, UBS analysts said: “Fed expectations – with UBS economists now predicting three 25 basis point rate cuts this year – the decline in real interest rates and a weaker US dollar have all been positive for gold prices.”
They also added that they do not believe gold is currently overvalued and cite macroeconomic factors, investor positioning and market dynamics as factors showing there is potential for further price increases.
Meanwhile, Citi analysts said in July that gold prices could rise to $3,000 an ounce as financial flows show potential for significant expansion. The bank said at the time that an accommodative move from the Federal Reserve “should be bullish for gold and silver through the end of the year,” with positive effects also expected for base metals such as copper.
What experts say about the gold price
That bullish sentiment is shared by John McCluskey, CEO of Alamos Gold. He told Investing.com that in assessing the multi-year outlook for the gold price, he is “quite optimistic when it comes to some of the price targets that are being set.”
“I have personally projected a target of $2,650 by the end of the year,” said McCluskey, who has been in the gold mining industry for more than 35 years.
“For the most part, we’ve been in a bear market,” he added. “However, it is clear that we are in a very strong bull phase and there are a number of factors driving record prices, apart from central bank purchases in Asia and de-dollarization.”
McCluskey cited political unrest and international unrest, as well as the issue of U.S. debt and the strength of the economy, as long-term factors that should continue to drive gold prices to new highs.
“The US debt has grown exponentially in recent months, reaching its current level of over $35 trillion,” he added. “Combined with expected Fed rate cuts and the upcoming US elections, as well as growing concerns about the US economy – these are all factors that could further boost the potential for gold.”
