Albert Edwards: Gold will soar to $10,000

published 3 May 2013

Most analysts "don't like to stand out from the crowd", says Albert Edwards of Socit Gnrale especially with a negative forecast. But Edwards has always been famously bearish. The S&P 500, now around 1,600, will slide to 450, he says; US ten-year bond yields will fall below 1%; and gold will shoot to $10,000 an ounce.

We are heading for another recession, says Edwards. The latest round of central-bank money printing won't stop the economy weakening. The recession will prompt the Fed to move to "QE infinity (squared)". All this will create a "Japanese-style loss of confidence in policymakers", panicking markets, and lay the foundation for "rapid inflation". So, once bond yields have hit Japanese-style lows, they will head "much, much higher".

Note that the long 1970s gold bull market saw a nasty, near-50% correction in 1974-1976 before the price went "parabolic". Soon, US real interest rates will head even lower as recession beckons, bolstering gold. And gold remains "a bet against central banks' competency". Given their track record and the further battering their reputation will endure, that's "a bet I'd still be happy to take".