(Kitco News) - Gold's recent surge has been largely attributed to geopolitical tensions and economic uncertainties, but Lobo Tiggre, analyst and the Editor of the Independent Speculator says these are not the primary catalysts behind the rally.
In a recent interview with Jeremy Szafron, Anchor at Kitco News, Lobo Tiggre challenged the conventional narrative surrounding gold’s price climb, which many credit to the ongoing geopolitical tensions, particularly between Iran and Israel.
"The geopolitical tensions are all the headlines right now. But gold's been ramping up now for a couple of months... So I don't think either can really be seen as the root cause here," Tiggre explains.
Tiggre highlighted the emergence of new market participants beyond the usual central bank buyers: "There is a new buyer in this marketplace, but the central bank gold buying has propped gold up or held it up."
This shift is significant, suggesting a broader base of demand that could sustain higher gold prices for longer.
Gold’s ‘real’ all-time high
While addressing the economy, Tiggre pointed out the misleading nature of nominal highs when discussing gold prices.
With inflation adjustments, he argued, gold’s true value is considerably higher: "One, it's not an all-time high. It's a nominal high. If inflation adjusts, even using the government's nonsense, CPI numbers and real all-time high would be over $3,400 or $3,500."
This perspective is particularly poignant in a time when inflation concerns are resurfacing.
"The sticky inflation story is really important. The Fed has guided it's going to be cutting rates. And, you know, Paul Krugman told us just last year that we beat inflation. There wasn't a problem and it's gone, it's done, it's over," Tiggre remarked, capturing the current economic sentiment and its implications for gold.
The Future of Gold
As for the future, Tiggre remained bullish on gold, fueled not just by economic indicators but also by a broader recognition of its value in uncertain times. He suggested that even minor shifts in investor behavior could significantly impact gold demand and prices.
"If 1% of the people around the world just decide, you know what, a little bit of safe haven metals, physical safe haven assets in my portfolio wouldn't be a bad thing, that will double your investment demand."
To dive deeper into the gold market and its new ‘buyer,’ watch the full interview with Lobo Tiggre on Kitco News above.