Peter Schiff Says North Korea Isn't Driving Gold, This Is...

New York (Sept 6)  Gold came close to a one-year high as markets focused on more heightened tensions surrounding North Korea, but to one famed investor, the yellow metal isn’t rising for the reasons people seem to think it is.

 “Gold was going up regardless of the political tensions in North Korea. Gold has been rising and it’s not because of a safe haven,” Peter Schiff, CEO of Euro Pacific Capital, recently told RT.

“If there was really geopolitical fear out there, the stock markets would be falling but they’re not. They are rising so people are not buying gold because they need a safe haven at least not from geopolitical events, I think they’re buying gold to get out of the U.S. dollar.”

The metal has been on a tear, recently trading near 11-month highs, as more missile threats out of North Korea dominated headlines. December Comex gold futures last traded around $1,338.60 an ounce.

Meanwhile, U.S. stock markets like the Dow Jones Industrial Average and S&P 500 continue to trade near record highs, last at 21,829.96 and 2,466.45, respectively.

But for Schiff to be convinced that gold is playing its “safe-haven” role, this would need to happen first.

“If we ever do get a real geopolitical threat, then I think people will flock into gold as they dump equities but that’s not happening yet.”

To Schiff, investors are getting out of the dollar and into gold as they look for safety from inflation, not geopolitical tensions. “I do think globally the risks [of inflation] are going to become more evident,” he said.

The longtime gold bull made the case for a weaker U.S. dollar, which has been on decline for six months in a row, he said. The U.S. dollar index recently hit a 15-month low, last at 92.25.

“The dollar had a substantial rise based on the expectation that the Federal Reserve would be able to normalize interest rates and unwind its balance sheet…now I think it’s starting to surrender those ill-guided gains.”

Schiff remains bullish on gold, calling for prices to continue steadily higher into year-end and “accelerate” in 2018.

“More and more people will be buying gold,” he said. “The dollar is going to go down regardless what the Fed does -- that trend is in motion.”

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