Adam Rozencwajg, managing partner at Goehring & Rozencwajg, has been bullish on gold for quite some time, but his firm has been mostly out of the market for the last couple of years. Now he sees signs that it’s time to get back in.

Speaking to the Investing News Network, he said that in 2020 two factors prompted Goehring & Rozencwajg to take a step back from gold. The first was that the gold-oil ratio was favoring energy, and the second was that silver had caught up to gold.

“We got those two signals at the same time,” he noted. “We had this idea that silver staged this catch-up rally, which in the past has been a sign that you’re going to take a bit of a breather, and you had the fact that on a relative valuation basis, the gold-oil ratio was so favorably skewed towards energy — we’ve never had a reading like that in which oil did not massively outperform gold.”

Now, however, it looks like it’s time to jump back in. “We think that gold has entered into a new phase of this bull market,” said Rozencwajg. “It probably started in the third and fourth quarter of last year, and it really revolves around central banks’ behavior as much as anything else. I think it’s going to propel gold much much higher in this leg of the bull market.”

Goehring & Rozencwajg’s price target for gold has five figures, although Rozencwajg didn’t share an exact timeline.

“I would guess it’s in the US$12,000 to US$15,000 an ounce range,” he said. “That might sound shocking — maybe it doesn’t, it depends who your listeners are — but that number’s not made up, it comes from a few different factors.”

Those factors include the relationship between how much gold the government holds and the amount of dollars in circulation, which Rozencwajg described as an implied gold backing. Looking at the price of gold relative to other financial assets is another way to get there. “That’s always kind of been our long-term price forecast on gold,” he said.

Watch the interview above for more from Rozencwajg on gold’s path forward.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.