Peter Schiff, chief economist and global strategist at Euro Pacific Capital, reiterated his bullish stance on gold, saying the world will return to the commodity which is the only viable monetary reserve asset.
What Happened: Schiff also cited legendary investor Warren Buffett's remarks in his tweet. Buffett had said during the annual shareholder meet that the greenback isn't at the risk of losing its status as the world's reserve currency and had asserted he doesn't see any other currency taking that place, according to a report by Markets Insider.
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"#WarrenBuffett said the U.S. dollar will remain the reserve currency as he sees no alternative. That’s because he’s looking in the wrong place. Buffett is correct that no other currency is viable. That’s why the world will return to #gold, the only viable monetary reserve asset," Schiff tweeted.
Gold investors and traders would be keenly eyeing the inflation data scheduled to be released later in the day. Spot gold was trading 0.21% lower at about $2,029 per ounce during Wednesday morning Asian trading session. The SPDR Gold Trust (NYSE:GLD) and the iShares Gold Trust (NYSE:IAU) closed over 0.6% higher on Tuesday.
If inflation continues to remain high, the Federal Reserve will be forced to continue its rate hikes, thereby leading to a potential rise in the greenback. A strength in dollar may not bode well for gold.
Hareesh V, the research head at Geojit Financial Services, told Reuters that if the U.S. inflation remains moderately controlled, it may lead to a pause in Fed rate hikes, which will weaken the dollar and support gold.
On Debt Ceiling: Schiff also expressed concerns regarding the huge national debt load of the U.S. and said raising the debt ceiling may not lead to any resolution. "The problem is the #debt, not the ceiling. The problem will never be solved if #Congress keeps raising the ceiling. The U.S. is definitely headed for a sovereign debt and dollar crisis, but not because Congress fails to raise the #DebtCeiling, but because it succeeds!" he said in his tweet.
Photo: Courtesy of Wikimedia Commons
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