Mining CEO: Gold Will Top $2,000

Release Date: 
Friday, April 11, 2014

Gold and Silver Prices

Gold prices moved back above $1300 per ounce following release of the Federal Reserve’s the March FOMC minutes which suggest the Fed will continue its low interest policies beyond the 6.5% unemployment threshold previously set by the Fed. “Gold prices carried Wednesday's gains into Thursday after the minutes from the Federal Reserve's March policy meeting revealed concerns among monetary authorities that U.S. consumer prices remain soft…The Federal Reserve Board of Governors unanimously voted to scrap a threshold that would hike interest rates once the unemployment rate hits 6.5%...a sign monetary authorities are growing concerned over low inflation rates…Low borrowing costs weaken the dollar, thus making gold an attractive hedge.” (“Gold extends gains as Fed minutes reveal weak pricing concerns,” NASDAQ, 4/10/14.)

Gold finished the week in positive territory, up $16.10, at $1,319.40.  Silver prices closed the week even at $20.06.

Mining CEO: Gold Will Top $2,000

Sean Boyd, CEO of Canadian mining firm Agnico Eagle, sees new record highs for gold.

“If we go back to the collapse in 2008 and look at the challenges in the global financial system, none of those structural problems have been fixed. Debt levels continue to go up, and debt as a percentage of GDP continues to go up because there is no growth. So all of the growth assumptions have been flawed. This all goes back to what Richard Russell said a dozen years ago, ‘Inflate or die.’ So that is the least painful way for developed nations to orchestrate the West out of this debt situation. This will ultimately be extremely positive for gold. So there are a lot of scenarios which point to the fact that holding physical gold in your portfolio makes very good sense.

“But the factors for a much higher gold price are not just on the demand side. The industry has been undergoing a transformation for the last two years which can’t help but impact supply as we go forward. This will have a positive impact on price because you are going to see constrained supplies in the future. When you combine that with increasing demand for physical gold coming out of places like China, India, and other central banks, that’s going to be the key driver for higher gold prices. It’s hard to say when gold will see new all-time highs because there are so many factors that drive the price. Gold at times is sentiment-driven, and sentiment remains negative. But for long-term investors, I think it’s a question of ‘when,’ not ‘if’ gold goes through $2,000.” (“Agnico CEO: Stunning Reasons Gold To Smash Through $2,000,” King World News, 4/9/14.)

Asian Market Could Send Gold Prices Higher

Veteran financial journalist and Forbes contributor, Royston Wild penned a commentary explaining why demand from Asia and the Middle East should send gold prices higher.

“We are undoubtedly witnessing an accelerating trend of moving gold stocks from vaults in the West to those of Asia and the Middle East, as countries in these regions seek to diversify their reserves from the US dollar and meet surging demand from local consumers…Gold has always held a special place in the hearts of Asian consumers, a metal which holds huge sentimental value and takes pride of place in centuries-old festivities...And the effect of a rising middle class in these developing Asian regions looks set to drive purchases steadily skywards, for decorative as well as investment purposes. In the eyes of Asian gold consumers the gold price is only heading one way, and that is up.” (“Why Asian Shoppers Should Blast Gold Prices Sky High,” Forbes, 4/10/14.)

Fed Minutes, Ukraine Tensions Driving Gold

Kitco metals analyst and columnist Jim Wyckoff wrote about the current factors affecting the gold market. “Traders and investors looked at the FOMC minutes and decided the last FOMC meeting, combined with recent remarks from Fed Chair Janet Yellen, paint a picture that is decidedly more dovish than they had earlier reckoned. Most now believe it will be a longer period of time before the Fed starts to raise its interest rates. More money in the U.S. banking system (quantitative easing) is bullish…for raw commodities due to the inflationary implications…The Russia-Ukraine tensions are still on the minds of traders and investors this week. Pro-Russian demonstrators in Ukraine have become more active recently…This situation could flare up quickly and once again become a geopolitical flash point. Gold would likely see safe-haven demand increase on any escalation of this conflict.” (“Solid Gains for Gold as Market Place Deems Fed More Dovish,” Kitco News, 4/10/14.)

Goldline’s Express IRA℠ Program

Many Goldline clients choose to include precious metals as part of their retirement planning especially during times of economic crisis and uncertainty.* Goldline’s Express IRA℠ allows clients to acquire precious metals on their schedule; they no longer have to wait for your self-directed IRA to be funded before getting started.

Goldline's Express IRA℠ not only provides clients with the ability to diversify their IRA on an expedited basis, clients can also qualify for Goldline's ground-breaking Two-Way Price Guarantee Program℠ when they acquire $10,000 or more of our exclusive bullion coins. When an Express IRA purchase qualifies for Goldline's Two-Way Price Guarantee Program℠, clients are protected on short-term upside and downside market movement: they can either call to reprice their coins if the selling price falls (up to a maximum of 28 days depending on the size of the purchase) or, if the selling price of the coins increase during the qualifying period, clients can call Goldline to acquire additional coins at the original selling price.

Goldline provides a wrap-up of the week's precious metals news along with important commentary on the American Advisor Week in Review audio program. Listen to the show below:

*Federal IRA tax laws are complex and may change from year to year. Goldline believes it is appropriate to have 5%-20% of retirement portfolio allocated to precious metals. Other individuals and institutions may recommend different percentages. As with any investment, you should consult your tax advisor before making a decision regarding precious metals IRA investments.

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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