Tangent Capital Investor: Gold to hit $4,000 amid deflation fears by central banks

Although the notion among libertarians, goldbugs and opponents of the Federal Reserve System is that inflation fears are causing the price of gold, silver and other precious metals to go up, others are now arguing that deflation concerns could drive up the price of the yellow metal in the future.

Jim Rickards of Tangent Capital told CNBC on Thursday that he foresees gold hitting $4,000 an ounce if the Fed’s monetary policy succeeds and deflation worries by central banks across the globe prove to be correct.

“The problem is when central banks fear deflation more than anything, they try everything to defeat it, so, you know, currency wars, money printing, zero-interest-rate policy, forward guidance, twist,” Rickards said in an interview with the financial news network. “They do everything they can. When they can’t win the battle against deflation, they devalue the currency against gold ’cause gold’s the only thing that can’t fight back.”

Rickards doesn’t believe the gold market will see that kind of action this year. However, he does think gold will start to go up towards the end of the year. “It’s actually going to go sideways for most of the rest of this year.”

This speculation is similar to Peter Schiff, president of Euro Pacific Capital, who has gone on record has suggesting the timeless precious metal would hit $5,000 an ounce – silver reaching $200. However, his forecast was because of runaway inflation due to money printing by the Fed and central banks across the globe.

“I do believe gold will ultimately eclipse $5,000.  I don’t know how high it’s going to go because there’s no ceiling on how low currencies can go.  There is no intrinsic value to the dollar, there’s no intrinsic value to any fiat currency.  There’s no limit to how much money central banks will print,” Economic Collapse News quoted Schiff late last year.

Gold ended the Thursday trading session higher at $1,466.60 amid the European Central Bank (ECB) cutting its interest rate for the first time in 10 months. This proved yet again that gold is the true safe haven in the world for investors as the ECB slashes rates and the Fed confirmed its persisting in its policy of indefinite monthly bond purchases.