The price of gold breaks records – and there were those who saw the past

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In recent months leading financial entities and businessmen have recommended investing in gold on many occasions.

In April this year Bank of America Published a report entitled “The Fed Can’t Print Gold” and bounced the 18-month gold price forecast close to $ 3,000 an ounce – 50% above its peak. The bank updated its previous previous target of $ 2,000 per ounce of gold.

In May noted Eduardo Elstein, The controlling owner of the IDB / DSK group in the annual letter to investors: “Fed is lucky that people are still willing to hold dollars, but what will happen when they realize that what they hold is worth less and less due to money printing?” Elstein added that in the near future we will suffer deflation as a result From the economic situation, however, because the unemployment rate is expected to remain very high, and the US administration and the Federal Reserve have promised to do whatever it takes to get out of the recession – the conclusion is that the fiscal deficit and money printing will be double-digit. He recommended investing in gold, the only non-print currency, and its price has soared by more than 30% since then.

In August also recommended Deer Stepak The controlling shareholder at Meitav Dash is investing in gold and noted that it is worth holding gold even when the stock market rises. Stepak recommended that an investor holding shares in his investment portfolio hold gold in a ratio of 1 to 5, that is, for every NIS 5 invested in shares, invest one shekel in gold. Because gold – thanks to its ability to behave in the opposite direction (negative correlation) to stocks, can serve in the next year or two as a shock absorber in the investment portfolio and provide some protection to investors over time.

So far, Elstein, Stepak and Bank of America’s forecasts appear to have been accurate. The interesting question, of course, is whether the rise in prices has exhausted itself or whether we are likely to see another jump in the price of gold.
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