If you think the price of gold is high now, just wait till next year, according to one leading gold market observer.

Bart Melek, TD Securities’ managing director and global head of commodity strategy, told CNBC last week that while the price of gold may have stabilized somewhat, he expects it to start heading up again.

“We are very likely to see….materially higher [gold] prices in the first quarter of next year,” he said.

Gold’s recent surge in price was fueled in part by heavy buying by central banks—they “purchased record numbers last year, the year before,” said Melek.

But the Federal Reserve’s decision not to lower interest rates has put a brake on the run, he added.

“There were many forecasts that the U.S. economy slows,” he said. If that happened, gold “would have been firing on all cylinders…. I think we’re in a bit of a pause for now.”

Melek said that his firm anticipates that unemployment will eventually begin to rise, which would mean lower interest rates, sparking a new bull market for gold.

Also on CNBC, Joni Teves, gold and precious metals strategist at UBS, predicted gold will hit $2,600 an ounce by the end of the year. (At press time, the spot price was $2,318 an ounce.)

“The expectation that the Fed cuts policy rates at some point, regardless of when that will come, is a supportive factor for gold,” she said. “I think investor sentiment is very strong.”

Teves said central banks and other institutions “created a strong base” for bullion, and she expects them to keep buying gold to diversify their portfolios.

“Gold has been resilient, in this environment where there’s a lot of macro uncertainty, there’s a lot of geopolitical risk,” she said.

(photo: Getty Images)

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