Gold prices are likely close to a peak, according to Rockfield Exploration President Luis Paez Soto, who believes that the continually rising prices seen for almost two years are set to come to an end.
The price of gold has been on the rise since late 2018, and this week the spot price hit a new all-time high, breaking the previous record set in 2011.
Whilst accepting that rises may continue a while longer, Paez Soto confidently predicted a peak well below $2,500 per ounce before prices started to fall again.
“Maybe we are not quite yet at the peak, but that point is close. For sure prices will begin to fall again before they hit $2,500,” said the executive, speaking to Chilean TV (comments translated from Spanish).
The comments fly in the face of market consensus, with the majority of analysts projecting continued price rises through 2020, and the most bullish predicting a year-end price of above $3,000 per ounce.
Explaining why he was going against the grain with his prediction Paez Soto, who founded Santiago-based Rockfield in 2016, said he believed not enough credit was being given to the impact of Covid-19 on gold prices. This impact would soon be reversed he said, as the planet comes through the other side of the pandemic.
“In my opinion the real peak was due in early 2020, just as the pandemic started,” he continued.
“Investors have naturally flocked to gold as a safe haven, driving prices still higher in the short term. But it is only short term, attention will turn to other markets as countries begin to return to some sense of normality.”
Paez Soto was reluctant to predict exactly how far he believed prices would fall before the end of the year, but when pushed for an answer said he believed the spot price would be “below $2,000, by at least three figures”.