Gold Investments Market Update – Gold to Reach $5000/oz According to Respected Goldcorp Founder
Gold surged a further 3.3% yesterday to $942.45 (as did silver) as worries about the US and global financial system and economy continue to grow and governments print money on an unprecedented scale to combat the economic crisis. Asian and European stock markets are again under pressure this morning.
The strong close above $930/oz yesterday should see us once again challenge the record highs of $1,003/oz seen last March (March 17th) when Bear Stearns collapsed.
We have since had a long period (nearly 12 months) of correction and consolidation and thus a solid foundation has been built from which the next leg of the bull market will likely be launched. Our forecast at the beginning of the year for gold to rise as high as $1,250/oz looks increasingly conservative.
Gold Surges to New Records in Euros and Sterling as Crisis Deepens
Gold continues to surge to record highs in other major currencies (the London AM Fix this morning was at $944.00 USD, £666.33 GBP and €737.04 EUR – http://www.lbma.org.uk/?area=stats&page=gold/2009dailygold). Worries about the health of the financial system and economy in the UK and EU is leading to weakness in the euro and sterling that has seen them fall in value versus gold. Gold has surged to €737/oz and over £666.33/oz (see charts below).
Gold to Reach $5000/oz According to Respected Goldcorp Founder
The respected founder of Goldcorp, Rob McEwen told Bloomberg how he sees gold rising to as high as $5,000/oz in the next four years. Goldcorp is the second largest gold mining company in the world by market capitalization.
As governments increase the money supply to combat recession, bullion will more than double to $2,000 an ounce by the end of next year. “Politicians around the world are listening to cries from their electorates and they’re giving money to all callers,” McEwen said yesterday.
McEwen has more than $100 million in gold investments and said he also has a “big, big” holding in bullion. McEwen said he started buying bullion in August 2007, at the beginning of the subprime mortgage crisis. “I realized we had reached an inflection point regarding money,” McEwen said. “It was all about protecting money, and gold served that purpose.”
The recent trend of fiat currencies falling vis a vis gold looks set to continue for the foreseeable future. McEwen’s bold prediction looks outlandish now (as did predictions of gold at over $1,000/oz in 2001) but given the confluence of extremely strong fundamentals, gold will likely rise to levels in the coming years that seem unfathomable today.