Trading director at Kitco Metals: Gold is headed for $1,020 - Video

Peter Hug, global trading CEO at Kitco Metals, who one week ago predicted a 5% drop was close, is now being interviewed by Kitco News. He says the psychological level for gold may be of a $1000 an ounce.

Hug says the geopolitical issues, along with other factors which created a perfect storm, suggested to him there would be a major drop in gold prices. Did the metal lose its allure? It depends on why you buy it. It is certainly a haven in case of economic turmoils and stock market collapse. Have a look at China - its stock market lost almost 35% of its value during some weeks.

With central banks all over the world printing money at a massive scale, the Fed is hardly to raise rates before 2016. This is a very stimulative central bank policy which is likely to spur gold when inflation kicks in. However, by no means there will be a surge from $1,100 or $1,090 to $2,000. Rather, it will be a grinding drop to $1,020 and even $1,000 as Hug suggested two years ago.