Gold Prices Should Rise Above $1,900/oz -“Get In Now!”

Gold prices are likely to rise above $1,900/oz in the next phase of the bull market and investors should “get in now,” Chief Market Analyst of the Lindsey Group, Peter Boockvar told CNBC’s “Futures Now” yesterday.

“This is just the beginning of a new bull market in the metals,” Boockvar believes.

Ultimately, Boockvar believes that the 2011 highs of around $1,900 for gold are not only reachable, but surpassable, as he reasoned that bull markets historically exceed the previous bull market peak at some point.

As Boockvar sees it, it’s just a matter of when.

“In order to be bearish on gold, you have to believe that the Fed is going to embark on 100 to 200 basis points of hikes over the next couple of years, which I think is completely unrealistic,” added Boockvar. “This is an ideal opportunity for those who have not gotten in.”

Citing the relative strength index (RSI), Boockvar said that gold is the most oversold it has been since mid-December. He also added that global interest rates have given trillions of dollars’ worth of sovereign bonds a negative yield. Coupled with rising Fed rates, this development would theoretically provide gold investors with positive carry on gold. 

For additional context, Boockvar highlighted the mid-2000s, when the Fed raised the Federal funds rate from 1 percent to 5 percent. During that time, gold went from $400 to $700. The analyst also cited the start of 2016, when Bank of Japan Governor Haruhiko Kuroda adopted negative interest rates. However, the move failed to help the nation achieve stability in its currency.