Gold Prices Expected to Rebound Despite Short-Term Decline
Gold prices may be declining in the short term but they will recover due to unsustainable fiscal situations and central bank allocations, according to Raphael Lamm, manager of the A$1.5 billion L1 Gold Fund.
The fund has seen a net return of more than 200% since its launch last year and Lamm attributes this success to the long-term support for gold prices due to government debt and central-bank allocations.
He expects the recent decline in bullion to be temporary, driven by short-term factors such as developments in the US-Iran war, real interest rates, and inflation data.
Lamm said that the 'unsustainability of fiscal situations in key markets', particularly US government debt of more than $40 trillion, will support gold prices over the medium to long term.