by Michael Pento, President of Pento Portfolio Strategies
Goldman Sachs has been predicting the demise of gold for the past few years. Last summer, the firm predicted gold would fall to $1,000 by the start of 2016. The firm reiterated that call in its latest commodities report (March 7), saying it thought gold would fall to that key level within 12 months.
The rationale is that gold is primarily a “safe haven” asset in times of economic and market turmoil and that the U.S. faced very little recession risk — so there is no reason for investors to seek the shelter of gold.
But gold bears fail to grasp what really drives the price of gold — and what has caused it to surge more than 15 percent so far in 2016.
Gold is not merely a “safe haven” asset. Rather, it is the best form of money known to humankind because of its scarcity and indestructibility.