Crescat Capital forecasts gold could reach $20,000 per ounce

Crescat Capital CEO Kevin Smith has projected that gold prices could reach $20,000 per ounce within approximately four years. This long-term forecast is based on two primary models: the relationship between the global M2 money supply and circulating gold stocks, and the sustained demand from central banks.

Smith notes that while gold experienced a natural correction after reaching an all-time high of $5,600 earlier in the year, the underlying macroeconomic drivers remain strong. Key factors include rising global debt, budget deficits in the United States, and the limited capacity of the Federal Reserve to combat inflation due to fiscal pressures.

Furthermore, central bank gold purchases have reached historic levels, averaging approximately 1,000 tons annually over the last four years. Smith also suggested that gold mining stocks, particularly smaller exploration and discovery companies, may offer higher return opportunities than the metal itself as large mining firms face challenges in new reserve investments.