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Once gold price hits $2,000, expect a 'sharp pullback' - Florian Grummes on crack-up boom, civil unrest, and Bitcoin target

Kitco News

It's only a matter of time before double-digit inflation hits the U.S. said Florian Grummes, managing director of Midas Touch Consulting.

"We are on track for that. It's just a question of time. It could happen this year, maybe next year. If the Fed indeed starts to hike and starts to taper…you see the markets already giving a clear signal, so I don't think they can do it aggressively at all, if they do it at all. They probably will roll back rather quickly during the year because end of the year we have midterm elections," Grummes told David Lin, anchor for Kitco News.

Gold's multi-year bull cycle is still continuing, Grummes said.

"Gold has done everything to disguise its true intentions. In hindsight, the flash crash of last August was actually the start of a multi-month uptrend. Today, we are trading $200 higher already. Gold has been correcting since August 2020. Over the last 16 months it went into a triangle and I think the last important low was mid-December, $1,750 and since then gold has been climbing higher," he said.

$2,000 an ounce remains an important key psychological level, Grummes noted.

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"I think we're going to $1,975 over the next few weeks, maybe one to three months, maybe even with a short overshoot towards the round psychological number of $2,000. The monthly Bollinger band is around $1,975 so that's for me the logical target of this rally," he said. "Very likely [gold] would be overextended if we reach this $2,000 level over the next few weeks or months, and then you probably will get a pullback and then it will take another few months until gold climbs higher again and tests this number again."

For more information on Grummes' Bitcoin outlook, watch the video above.

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