Yardeni Says Gold Could Hit $6,000 an Ounce by End of Year

"I'm still using 6,000 by the end of the year, and I'm still using 10,000 by the end of the decade... I think this could be the beginning of a bull market simply on the geopolitics of the US and Europe freezing the assets of the Russian central bank." The weaponization of fiat reserves has triggered a structural shift in global finance. Sovereign nations and central banks are forced to diversify away from US-dollar-denominated assets into censorship-resistant stores of value like gold. Furthermore, as retail and institutional equity portfolios grow, standard asset allocation models will mechanically drive more capital into gold for diversification. Long GLD to capture both the geopolitical premium from central bank buying and the long-term wealth effect from rising equity markets. A sudden de-escalation of global geopolitical conflicts or a severe deflationary shock could reduce the urgency for sovereign gold accumulation.

"I still am using 7,700 in the S and P by the end of the year, and I'm still using 10,000 by the end of the decade. So I'm not giving up on my Roaring 2020s scenarios." Despite concerns over inflation driving bond yields higher, the underlying economy is experiencing robust, secular growth. Corporate earnings and productivity gains are strong enough to overpower the drag of higher interest rates. Because bonds are failing to provide adequate diversification against inflation, capital will continue to consolidate into equities as the primary engine for real wealth creation. Long SPY to participate in the ongoing secular bull market driven by resilient economic fundamentals and a lack of viable alternatives in fixed income. Persistent, runaway inflation that forces central banks into aggressively restrictive monetary policy could eventually break corporate earnings and halt the equity bull market.