According to 24K99, as investors seek safe-haven assets to shield themselves from what is being described as the largest global banking crisis since the 2008 financial crisis, the gold market is once again aiming for a sustained breakout above $2,000.

Willem Middelkoop, Chief Investment Officer and Founder of the Commodity Discovery Fund, recently told Kitco News that he expects it is only a matter of time before gold prices break their all-time high this year. However, he added that, viewed in a broader context, regardless of where prices stand today, they will be significantly higher three years from now.

He said, “In three years, we will look back and see that today’s gold prices are cheap. We will regard this as the true beginning of a major price surge.” “We are very close to a turning point in the global monetary system.”

Middelkoop made these remarks as gold prices climbed to a 12-month high of $2,014.90 on Monday, March 20. Although prices have since pulled back from that peak, they remain close to the $2,000 mark. COMEX April gold futures settled up 0.47% at $1,982.80 per ounce.

Middelkoop says the most important driver of gold is the accelerating shift in globalization. He explains that, as the U.S. dollar’s status as the reserve currency begins to wane, the world is rapidly moving toward a multipolar system.

He pointed out that, following Russia’s invasion of Ukraine last year, U.S.-led sanctions against Russia have brought global financial markets closer to a major confrontation between Western and Eastern countries.

He said, “Retail investors don’t understand this, and the media generally doesn’t either—but at the highest levels, central banks do understand what’s happening. They’re hedging their risks by buying gold.”

Last year, data from the World Gold Council showed that central banks worldwide purchased 1,136 tonnes of gold, the highest level on record since the 1950s.

He said, “When central banks around the world begin to flock to gold, it is a powerful signal that there is deep-seated distrust at the core of the financial system.”

The largest holder of gold at the central bank level is the People’s Bank of China, which has purchased 109 tonnes of gold since November last year. Middelkoop said he expects China to continue buying gold this year.

“It is no coincidence that China has just resumed disclosing its gold purchases. By doing so, it is drawing the world’s attention to the fact that it holds an international currency.”

Although deglobalization will serve as a new long-term driver of gold prices, Middelkoop says he expects the spark that ignites a surge in gold prices will come from a pivotal shift in the Federal Reserve’s monetary policy.

UBS Group announced on Sunday that it will acquire the struggling Credit Suisse, making the latter the latest victim of the global banking crisis. The global banking crisis has introduced significant volatility into U.S. interest-rate expectations.

Two weeks ago, the market expected the Federal Reserve to raise interest rates by 50 basis points when it announced its monetary policy this Wednesday. Those hawkish forecasts have now completely vanished, with the market now assigning close to a 40% probability that the U.S. central bank will hold rates steady.

Middelkoop notes that gold prices first broke through $2,000 in 2019, when the Federal Reserve swiftly cut interest rates, bringing an end to the tightening cycle that had begun in 2015. He also says he believes a similar dynamic is unfolding: financial-market turmoil will compel central banks to halt their aggressive tightening policies.

He said, “Once it breaks the $2,000 mark, it will start surging.” “Once $2,000 becomes the new support level, all hedge funds and speculators will flood into the market.”