Gold could eventually climb back to $5,000 an ounce, although investors may have to wait several years for the metal to reach that level. This is according to David Miller, CIO and co-founder of Catalyst Funds and portfolio manager of the Strategy Shares Gold Enhanced Yield ETF.
Speaking in a recent interview, Miller said gold’s long-term outlook remains positive despite the market’s recent consolidation after a sharp rally. He estimates that the metal could take approximately two or more years to return to $5,000.
Several forces continue to support gold, including persistent government deficits, inflation and efforts by central banks to reduce their reliance on the U.S. dollar. Miller expects central-bank demand to remain an important source of support, particularly as countries reassess their exposure to dollar-based assets amid ongoing geopolitical and economic uncertainty.
China, he added, could remain a major buyer of gold over the longer term. Alongside continued U.S. deficit spending, such demand could help establish a floor under prices.
This year, he expects gold to deliver mid- to high-single-digit gains, suggesting further upside even without an immediate return to record levels. A major part of his bullish argument is the growing pressure on fiat currencies from high government debt and persistent fiscal deficits.
In his explanation, Miller outlined various potential ways governments can deal with large debt burdens: allowing inflation to reduce the real value of debt, achieving stronger productivity growth, or pursuing austerity.
He sees the possibility of inflation being combined with productivity gains driven by artificial intelligence. In his view, inflation remaining around 3% would not necessarily be damaging if economic growth and productivity were strong enough to offset some of its effects.
This environment could also strengthen the case for real assets such as gold, particularly when bond returns fail to keep pace with inflation after taxes. However, gold has one major drawback compared with traditional fixed-income investments: it does not generate income. That is where Miller sees an opportunity for the Gold Enhanced Yield ETF.
The ETF combines gold-related exposure with income from investment-grade corporate bonds, aiming to provide investors with both participation in gold’s potential appreciation and a source of yield.
His outlook therefore remains constructive. While gold may need time to regain its previous highs, he believes the underlying forces supporting the precious metal remain firmly in place.
Taken together, persistent inflation, elevated government debt and continued central-bank demand could keep gold on a long-term upward trajectory, with the $5,000 level remaining a realistic target for investors willing to take a longer view.
That long-term view is what keeps exploration firms like Numa Numa Resources Inc. focused on their projects so that they can benefit from the gains gold registers over the coming years.
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