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The gold market is higher in action on Tuesday as the bulls look to continue the recent ascent in price. The metal is higher by a few bucks per ounce today, currently sitting just above the $1875 level. The bulls are well within striking distance of key resistance at the $1900 level and could look to test this area this week or next. A close above $1900 could give the bulls needed ammunition to mount a sustained rally higher that could eventually see the market test previous all-time highs. A failure at this level could prove equally bearish, however, and could give the bears reason to sell more aggressively.

Famed economics professor Nouriel Roubini today said that he is expecting a rate of return in gold of 10% per year for the next five years. Roubini cited several factors for this outlook, including wars, inflation, a demographic “time bomb,” debt crises and more. He referred to ten mega threats that are hurtling towards the world and that could send the price of gold significantly higher. Roubini did mention inflation, stagflation and de-dollarization as being the primary drivers of higher gold in the years ahead. He cited the dollar as being weaponized and suggested that the only asset that could not be used by the U.S. or West for sanctions is gold.

The world is full of tensions already, and these tensions could mount in the year or years ahead. A Chinese invasion of Taiwan, for example, could greatly heighten tensions between the U.S. and China. The ongoing war in Ukraine may also keep inflation floating around and could also increase global tensions. China, Russia, Iran and others may challenge the U.S. and Europe for global dominance in the coming years. As they do, the importance of gold is likely to become all too clear-especially for those that do not own any of it.

There is also, of course, the Fed and what it decides to do this year regarding monetary policy. The Fed recently raised rates by 50, rather than 75, basis points. The central bank may continue to hike rates, albeit at a smaller clip, as it has suggested rates may need to remain higher for longer. To get the job done on inflation, however, Roubini feels rates would need to exceed six percent. The Fed is extremely unlikely to approach this level, however, as a six percent interest rate would basically ensure a severe recession in the U.S, and possibly elsewhere. The Fed is far more likely to raise rates a couple more times in small increments before announcing it will take a pause or even reverse course.

Should the Fed bail out early on its rate hiking game plan, gold and other assets could skyrocket higher. The next several months will provide markets with more clues about the Fed’s intentions. Until then, the path of least resistance for gold remains higher.