By ‘This BRICS conference is a win-win for gold,’ he said, explaining that it’s significant to see six new countries joining the bloc. The new entrants are Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates.
‘I think that’s the beginning — they’re going to keep expanding after that,’ Durrett said. ‘There’s another 35 countries that want in, and as those countries come in that’s going to slowly create this de-dollarization effect.’
Ahead of the meeting, discussions were focused on whether the BRICS would announce a gold-backed currency. While Durrett was disappointed that didn’t happen, he pointed out that the yellow metal can rise much higher without that boost.
‘(A BRICS currency is) going to have a huge impact on gold if it happens — this is where gold goes from US$3,000 (per ounce) to US$5,000,’ he said during the interview. ‘But to get to US$3,000 we don’t need a BRICS currency. We already have plenty of reasons why gold’s going to go to US$3,000. A BRICS currency just pushes it higher.’
In terms of where gold is at currently, Durrett said it’s been trapped for the last 18 months and won’t be set free until the stock market capitulates and Wall Street realizes that the US is heading for a hard landing. In his view, gold will face a final correction as this starts to play out, but will then break away from the stock market and bounce upward.
‘I think it will bounce because of fear — the fear trade will reignite, and once that fear trade reignites, gold’s going to start trading higher and it will decouple from the stock market. (For) that decoupling, for me the important number that I’m watching is US$1,800 to US$1,825 on gold — I expect US$1,825 to get tested, but I want US$1,800 to hold,’ he explained.
Durrett believes it will be difficult to make money in the coming decade, and said his focus is on gold and silver stocks, as well as physical gold and silver and other commodities. As prices for gold and silver move higher, he expects companies focused on the metal to rocket upward as well. He said juniors could deliver returns of 600 to 1,000 percent, while mid-tier companies could rise as much as 400 to 500 percent range. On the major miner side he gave the example of Newmont (TSX:NGT,NYSE:NEM), which he thinks could deliver a return of 300 percent.
Watch the interview above for more of Durrett’s thoughts on gold, silver and more.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.