Schroder Investment Management Limited, who manage $277 billion of assets, making them slightly larger us, have floated the idea that gold could reach such lofty heights.

Christopher Wyke, London-based emerging market debt and commodities product manager at Schroder said:

“You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value,”

“Investors are turning to gold for protection as two-thirds of the world’s population cope with inflation rates that are climbing to more than 10 percent, Cash and inflation- linked bonds are poor substitutes as low interest rates, coupled with surging inflation, erode the real value of assets,” he said.

Unfortunately Mr Wyke did not include a time frame for his projections, which is a shame as it leaves this statement open to conjecture. His assertion appears to be based on the demand for gold from central banks as they become net buyers for the first time in two decades, plus demand from developing countries and production dropping to its lowest since 1937. The article goes on to say that the total amount of gold above ground is worth about $4.8 trillion, compared with global stock and bond markets worth $135.2 trillion and that the limited amount of gold available, relative to the size of the global capital markets, means a small shift in investments may lead to significant price changes for the metal.

And it will no doubt catch most of us off guard when it happens. So it is back to research for us.

Have a good one.

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