Jim Rickards: Dynamics in Place for $10,000 Gold (Video)

Jim Rickards has been predicting $10,000 gold. Recently, he appeared on CNBC’s Squawk Box and stuck to that prediction, saying the dynamics are in place for gold to reach that $10,000 mark.

Rickards said he thinks we are at the beginning of an extended gold bull market, possibly similar to the late 1990s when the price of the yellow metal went up 615% over a 12-year period. He conceded gold can be volatile, so he doesn’t pay as much attention to short-term fluctuations in price. But he did note an interesting fact in the wake of the recent price jumps after some major world events:

What impresses me is that gold going up immediately after the Brexit vote, or gold going up a little bit after the Turkey coup, that you can understand. Those are kind of flight to quality, fear-trade reactions. But gold didn’t go down a lot when those things were over…It’s got a very good foundation – kind of around the $1,330 level, so it seems poised to go up a lot from here.”

Rickards went on to explain that the Fed has backed itself into a corner, and no matter what it does, it will likely bode well for gold. When asked if $1,450 is a possibility for this year Rickards focused longer-term, once again making his case for $10,000 gold.

I’ve got gold going to $10,000 now. So, I’m the guy with the highest price target out there…It could be a matter of weeks or a matter of years. This is one of these avalanche type event things. You don’t know when the snowflakes are going to hit. It’s going to be a change in psychology, a panic reaction, and it will happen very quickly…it could be a five-year play or it could be a one-year play depending on circumstances. I don’t really want to get into the timing of it except that the dynamic is set up for $10,000 gold. As far as a $1,450 price target, yeah it’s got to pass $1,450 on the way to $10,000.”

Highlights from the interview:

“I think this is the beginning of an extended bull market. When I say extended, we could be looking at something like 1999 where it went up 615% over a 12 year period.”

“What impresses me is that gold going up immediately after the Brexit vote, or gold going up a little bit after the Turkey coup, that you can understand. Those are kind of flight to quality, fear-trade reactions. But gold didn’t go down a lot when those things were over…It’s got a very good foundation – kind of around the $1,330 level, so it seems poised to go up a lot from here.”

“I think the key thing is central banks, and the Federal Reserve in particular, are in a corner. If they ease, and I expect they will lean in that direction – if they ease, you’re sooner or later going to get some inflation, or at least you’re going to get lower real rates, which is very bullish for gold. If they tighten, that’s going to be a blunder. They might do that, but they’re going to burst bubbles – stock markets, housing, commercial real estate all look like bubbles. You really can’t tighten without bursting bubbles. That’s going to create a fear-trade. So I think gold wins either way.”

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“There is that inverse relationship between dollar index strength and the dollar price of gold. So, that’s a general rule. But there are exceptions to every rule. One of them is when there is a liquidity crisis or a fear-trade people go to the dollar and gold.”

“Gold has gone from the commodity space to the money space. Gold today competes as a form of money. So if you want to get out of euros, or sterling, or yuan…I think you look at dollars and gold. So it’s a little bit unusual, but they can both get stronger on this basically a horse race for what’s the most desirable form of money.”

“I’ve got gold going to $10,000 now. So, I’m the guy with the highest price target out there…It could be a matter of weeks or a matter of years. This is one of these avalanche type event things. You don’t know when the snowflakes are going to hit. It’s going to be a change in psychology, a panic reaction, and it will happen very quickly…it could be a five-year play or it could be a one-year play depending on circumstances. I don’t really want to get into the timing of it except that the dynamic is set up for $10,000 gold.”

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