Gold Most Likely to Double

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Hong Kong (Kitco News) -- Gold will most likely double from its current $1150 an ounce during the course of the bull market, according to Puru Saxena, founder of Puru Saxena Wealth Management.

In an exclusive interview with Kitco News, Saxena said one major factor in gold’s favor "is that central banks have now become net buyers of gold. So that reduces supply from the market,” said Saxena.

Investment demand will appreciate over time as people become more dubious over currencies and they transfer assets into gold as a hedge, said the investment adviser from his Hong Kong office.

He thinks inflation will occur at an accelerated pace over the next few years. "Real interest rates are negative in most countries, so gold should continue to benefit purely as an anti-currency because people lost faith in the euro and the dollar," he said. "At some point people are going to say well, ‘we don’t want to lose purchasing power in currencies that are dubious, we want gold as an insurance.’”

Saxena is not so optimistic, however, for base metals, which he said are likely to struggle. “If you look at the inventory levels at the London Metals Exchange, the stockpiles are extremely elevated and inflated," he said. "So even though copper, lead and zinc have had a big run-up since last August, inventory levels have actually increased, so that leads us to believe it is speculation.”

As for the sudden rise of palladium, Saxena cautions against this metal for now. “Palladium has gone parabolic. Usually when you have a parabolic spike they are followed by a parabolic collapse," he said. "I think palladium will have a big correction and when it does, that will be the time to buy."

Currently, Saxena said he is fully invested in his preferred companies. “We think the bull market will run for another couple of years – in my view we will see a big boom again in all asset classes,” he said.

Saxena sees more opportunities in precious metals and energy. He said that he is invested 35% in energy and 15% in precious metals. On currencies he prefers the Canadian and Australian dollar, as well as the Singaporean Dollar, Chinese Yuan and the Indian rupee.