Bridgewater Associates, which manages about $160 billion in assets, says investors would be mistaken to think the geopolitical seas will be calm after the United States stepped back from the brink of war with Iran and signed a phase one trade deal with China.

“There is so much boiling conflict,” Bridgewater co-chief investment officer Greg Jensen told the Financial Times on January 15 as the U.S. and China announced the first phase of their trade accord. “People should be prepared for a much wider range of potentially more volatile set of circumstances than we are mostly accustomed to,” he added. Renewed political risk, Jensen said, could drive gold to $2,000 an ounce.

Bridgewater Associates has been bullish on gold for more than two years, as the giant hedge fund‘s founder Ray Dalio has recommended investors hold 5–10 percent of their portfolios in gold. He has argued the easy monetary policy of the Federal Reserve and other central banks will be a driving force for gold. Jensen now is doubling down on that prediction, arguing the Fed may cut short-term interest rates to zero to avoid a recession.

A low-interest rate environment can be bullish for gold, as fixed income investment vehicles lose their competitive edge against precious metals. Jensen predicts the Federal Reserve will try to revive inflationary pressures with its low interest rate policy, which would also be bullish for gold since it serves as a hedge against inflation.