It is no secret that gold has stolen the financial headlines for months now, as its worth flourished as the financial health of many nations plundered.

While many financial analysts cautiously label this movement as a bubble, Erste Group Bank AG analyst and Annual Gold Report author Ronald Stoeferle argues that not only will gold reach $2,300 USD per ounce, but the latest flurry of activity and interest in gold is actually just the beginning.

When asked about his confidence in the future of gold, Stoeferle attests two main solid drivers for the bullish market, far exceeding the gold’s last bullish movements experienced in the late 1980s:

  1. Fear. With the world holding negative or low interest rates, investors are constantly seeking safe havens from hyperinflation and financial Armageddon.  Gold’s inverse relation to bonds and almost no correlation with equity makes perfect sense from a portfolio perspective.  It has already lead high-profile hedge fund managers such as John Paulson to lean highly favorable towards gold.
  2. China and India. The feverish demand from these two nations far exceeds the Western world, and the reasons behind its steady increase should be noted.  Their affinity for gold is deeply rooted in their culture and society, leading its demand to be far more stable than a trend.