Asked where he expected gold to go after the paper market broke down, Kiener said he expected gold to double in price, “in a very short period of time, it will spike up quite fast,” he added.
“If you had an oil rally going from $65 to $140 dollars in nine months, I think it can double in gold in a much shorter period because the market is much much smaller,” Kiener stated.
Kiener pointed out that the expected global reduction in interest rates, kick-started last night by the Australian central bank’s one point cut, means gold is a far more attractive option than any currency because purchasing power of paper money will continue to decline.
As we highlighted yesterday, the demand for physical gold is frantic and people are willing to pay premiums of $50 or more to get their hands on the precious metal.
The potential for hyperinflation is a very real threat, and it has led to a spike in gold purchases. The Royal Canadian Mint recently sold out of one ounce gold bullion bars in what tellers described as a “crazy” demand to own the precious metal.
Michael Levy, a gold broker based in Surrey, B.C., said the volume of people purchasing gold is at its highest since the inflation scare of 1979. “People were buying then because of inflation, now because of a growing distrust in paper currency,” he said. “It’s a different mentality but the same rush.”
Yesterday, 40-year market veteran and fund manager Robin Griffiths of Cazenove Capital Management told CNBC that the overprinting of dollars as a result of the Wall Street bailout will act as a catalyst for gold prices to rocket to $2,000 an ounce, as demand for precious metals outstrips supply amidst rumors of market manipulation.
Paul Joseph Watson