Felix Zulauf believes gold will head higher in the latter half of this decade, supported by geopolitical tensions and government debt.
Zulauf, CEO of Zulauf Consulting, spoke to Kitco on Monday at the 2022 Precious Metal Summit Zurich. He said gold is starting to look past the Fed tightening and strong US dollar which has hurt the metal.
"I think we are coming to the end of tighter money. We will see a U-turn by the Fed in the spring. Precious metals are beginning to discount that," said Zulauf.
Over the medium term, gold isn't great. The eight-year cycle in gold, which saw a top in 2020, points to a cyclical low in 2024, said Zulauf. After that, the metal should run due to geopolitical tensions and government debt loads.
"The world is moving towards a major conflict between the U.S. and China—between the autocratic and the democratic system," said Zulauf. "The second is that many of the governments in the Western world will be bust and will go bankrupt. I think their currencies need to be reformed."
With central banks raising interest rates, governments will have less room to maneuver, since they will have to service the debt costs.
"The next 4-5 years will be dramatic. We will see things that we only see in developing countries. [Developing nations] will go bust every 20 years or so. It is coming to the industrialized world, because we are over-indebted."
Zulauf Consulting is a boutique research and consulting firm that offers investment advisory services to institutional investors and family offices.
Coverage of 2022 Precious Metal Summit Zurich is sponsored by Inventa Capital.
