Gold at ‘multiples of $3,000’ possible, Sprott says

As gold prices continue to rise, having hit a new record of $3,245.42 per oz. Monday, geopolitics and other factors could push yellow metal prices even higher, said Toronto-based asset manager Sprott.

Even with Tuesday morning’s slight pullback to $3,223.70, gold has still gained 23.7% this year to date. This follows last year’s 27.23% increase.

“The migration of capital to gold and possibly other monetary metals could result in a price that is multiples of the current price of $3,000 per ounce,” John Hathaway, a managing partner at Sprott, wrote Friday in the Sprott Gold Report.

Gold prices have benefited as investors sought safe assets amid geopolitical tensions, central bank gold buying, inflation and a weakening US dollar.

Gold ETFs rise

Meanwhile, gold-back exchange traded funds (ETFs) are likely to benefit from shifts in capital flows, Hathaway said.

“Expanded flows into most gold ETFs must be accommodated by the purchase of physical metal,” he said.

Gold ETF growth this year has been significant. Fund assets grew by $21 billion in the first quarter to reach their second highest quarterly level by value since the second quarter of 2020, according to data from ETF research firm MineralFunds.

As the end of March, the 70 unhedged gold ETFs tracked by MineralFunds had combined assets of $261.7 billion.