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Industry Experts Comment on Gold

Release Date: 
Wednesday, September 21, 2011

The Federal Reserve announced a plan today to swap shorter-maturity government securities for longer-dated ones in an effort to spur on the slow-moving U.S. economy. Darin Newsom, a senior analyst at Telvent DTN, said that this announcement could support the gold market by putting renewed pressure on the U.S. dollar index.

Gold may rise to $2,000 an ounce by the end of this year and $2,300 an ounce by the close of 2012 because of investors buying the metal as a safe haven asset amid turmoil in financial markets, Newmont Mining Corp. Chief Executive Officer Richard O'Brien said.

"We're going to continue to be in a bullish gold-price environment for the next five to seven years," O'Brien said yesterday in an interview at the 2011 Denver Gold Forum in Colorado Springs, Colorado. "It's going to take that long for people to get their fiscal house in order."

Gold climbed to a record earlier this month and is in the 11th year of a bull market, the longest winning streak since at least 1920.

"Gold is simply a mirror of economic and political failure, of all the uncertainties that make people worry," said Gerry Schubert, the head of precious metals at Emirates NBD in Dubai, who has traded gold since 1979. "If you have $50 million, what would you do with that money? You buy gold. Hedge funds, central banks, sovereign funds: all are buying gold."

(Sources: "Gold Price May Reach $2,300 in 2012, Newmont's O'Brien Says," Bloomberg, September 21, 2011; "Gold struggles to stay above $1,800 ahead of FOMC," MarketWatch, September 21, 2011; "Bullion Vaults Run Out of Space on Gold Rally," Bloomberg, September 21, 2011)

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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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