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Pierre Lassonde: Gold to reach $2,400 by 2028 as geopolitical tensions mount, central banks purchase more bullion

Kitco News

Gold will hit as high as $2,400 per ounce over the next five years, as countries like Russia seek to divest of U.S. dollars, after the dollar was weaponized following Russia’s conflict in Ukraine. That’s according to Pierre Lassonde, Chairman Emeritus of Franco-Nevada and CEO of Fireside Investments, who suggested that a dual system of currency could emerge by 2028.

“I think in the next five years you will see a dual system of payment and currency,” he forecast. “What’s precipitating [this] is essentially the Russia-Ukraine war… To my mind, over the next five years, you will see $2,300 to $2,400 gold because of that.”

Speaking at the BMO Metals, Mining, & Critical Minerals Conference with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, Lassonde observed that central banks are buying more gold as geopolitical tensions mount across the globe.

Central bank gold buying in 2022 was the highest since 1950, with central banks purchasing 1,136 tons. This follows twelve years of central bank net gold purchases.

Lassonde, who pioneered the publicly-traded gold royalty model in 1983, and has five decades of experience in the finance and mining industries, suggested that central banks, especially in the BRICS (Brazil, Russia, India, China, and South Africa), are buying gold as a prelude to creating an alternative to the U.S. dollar as a reserve currency.

“These central banks are buying gold as a reserve currency,” he claimed. “Will they use gold to back a new currency? We don’t know… What I do believe though is that at the end of the day, you will end up with a dual world in terms of system of payment and the currency you pay, and that is not good for the dollar.”

The BRICS nations are worried about U.S. influence in their affairs, according to Lassonde, and decoupling from the U.S. dollar will help them to gain more autonomy.

“Particularly China, but [also] Russia, India, and some other countries are in the process of creating a dual system of payment, of currency, to counteract the U.S. dollar,” he said. “The fate of all reserve currencies is to go down, simply because of a balance of payments. When you can write an unlimited check, what do you think happens?”

The forecast of a bifurcation of the global monetary system has been advocated by a number of voices, including Canadian mining mogul Frank Giustra.

Lassonde also suggested that certain junior miners could fare well as gold reaches new heights.

To find out which junior miners Lassonde is investing in, watch the video above

Recession and Stock Market Crash

A recession and stock market crash will happen in 2023, according to Lassonde. He suggested that the economic havoc that would result would benefit gold.

“I think you’re going to see the U.S. economy enter into a recession in the next two quarters, and it’s going to be a fairly significant recession,” he claimed. “All the forecasts are overstating earnings. They’re going to come down, and with that you’re going to see the S&P come down by about 30 percent.”

Lassonde said that the U.S. Federal Reserve would react to the recession by lowering rates, but “not fast enough.” In turn, this would harm the U.S. dollar, and cause investors to flock to gold.

He singled out gold equities as performing well under pressure.

“Gold equities are not going to [come down] because they carry dividend yields that are going to keep them up,” he forecast. “At $1,850 gold and $4 copper, the industry is doing quite well.”

To find out Lassonde’s inflation outlook over the next five years, watch the video above

Follow Michelle Makori on Twitter: @MichelleMakori

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.