Tags: Schatz | gold | two | thousand

Heritage Capital’s Schatz: Gold Will Break $2,000

Wednesday, 18 Apr 2012 07:50 AM

By Dan Weil

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Gold’s 16 percent drop from its record high of about $1,920 an ounce set last September represents a correction that it almost over, says Paul Schatz, president of Heritage Capital.

He tells Yahoo the price will break $2,000 late this year or early in 2013. That would represent a 21 percent gain from the recent level of $1,650.

Accommodative monetary policy across the globe will boost the precious metal, Schatz says. The Federal Reserve already has completed much of its easing, but the European Central Bank and the Bank of Japan are just getting started, he maintains.

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In addition, in the U.S., real interest rates are negative thanks to the Fed’s policy, making gold an attractive alternative to bonds.

Gold’s correction over the past seven months is “shaking out every weak-handed holder possible,” Schatz says. “But I think it’s going to bottom some time this quarter.”

That bottom could come in the $1,500s, Schatz says. Then we’ll see the move to $2,000. And “I don’t think we’re going to stop there,” he says.

“That sets stage for next run. Is it $2,200, $2,300?” The bull market has years to go, Schatz says.

Star investor Jim Rogers expects the gold correction to continue, given its 11-year rally, though he remains a long-term bull on the precious metal.

"I would buy gold if prices fall to $1,100 or $1,200 an ounce. A pullback of this magnitude is normal," he tells S&A Investor Radio.

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