In a King World News interview Rob McEwen suggest that gold will go to $2000 this year and then accelerate while returns in silver could be even better
Author: Lawrence Williams
Posted: Tuesday , 10 Jan 2012
LONDON – Gold believers tend to hang on Rob McEwen’s every word. After all it was he who drove Canada’s second largest gold mining company, Goldcorp, to its position among the top five global gold miners from pretty small beginnings. He achieved this through his belief in gold and, initially in the Red Lake gold mining district in Ontario, but then through seeking out new gold mining areas in mainly politically safe environments. Latterly he fell out with Goldcorp, in part over a move into silver and base metals which he felt diminished the company’s gold base, but latterly in his new company building phase with U.S. Gold he has at least become a bit of a convert to silver, alongside gold, as having huge price growth potential.
So, his latest interview on King World News (McEwen – Gold to hit $2,000 & Accelerate, Silver $150 – $300)will certainly have grabbed the attention of gold and silver followers given his still extreme bullishness on the likely path of the two principal precious metals. In the interview he reckoned that gold was still under-owned and under-represented in most portfolios, and given that all western governments have been printing money rather than face their enormous debt problems head-on, that at some stage the consequent debasement of currencies will drive those with money into hard assets like gold and silver, at which point their prices will explode in a buying mania.
Although investment in gold, and latterly silver, has been growing substantially over the past decade, it still represents only a tiny fraction of global financial assets as pointed out by Julian Phillips in his article on Mineweb today entitled Not enough gold! What’s the solution? from which the pie chart below, which highlights this discrepancy is reproduced.
In specific price forecasts, McEwen reckoned that gold and silver were gathering strength. The former would take a run at $2,000 this year and then really start to move and on silver McEwen felt it a particularly exciting investment option. He commented that there is growing demand and that because of the lower price it is easier to invest in and felt that eventually it could hit the $150 to $300 levels – although no timeframe specified for this.
Meanwhile he sees the current prices for precious metals mining stocks as a great entry point and that the current low price (relatively speaking) with much higher stock prices ahead.
Now obviously McEwen, as CEO of a junior gold and silver mining company, does have his own agenda here, but there is no doubt that he does believe in gold and silver and he does put his money where his mouth is! He owns 20% of U.S. Gold which is concentrating on projects in Nevada and Mexico both of which are targeting 2014 for first production. McEwen has the avowed intent of building the company to qualify as an entrant into the S&P 500 by 2015. If he is anywhere near right on gold and silver prices he has every chance of achieving this, particularly as it will get a boost with its proposed merger with Minera Andes and a subsequent name change to McEwen Mining.