Gold may hit $5,000 an ounce in 3-4 years: Canadian miners

By Polly Yam

HONG KONG | Wed Mar 23, 2011 9:41am EDT

(Reuters) - The price of gold may hit $5,000 per ounce, nearly three times current levels, in three to four years, as demand from sovereign states, central banks and exchange-traded funds (ETFs) rises, the chairman of two Canadian gold mining companies said.

"Gold is used as insurance for bad governments," Rob McEwen, chairman and chief executive of Minera Andes Inc and US Gold Corp, told Reuters on the sidelines of the Mines and Money conference in Hong Kong on Wednesday.

Gold is traditionally used as a hedging tool against inflation and economic uncertainty. The yellow metal has also been a favorite investor hedge against loose monetary policies in the wake of the global financial crisis.

McEwen said gold was in the middle of a super cycle that could end by 2015, adding that the length of the gold super cycle and the $5,000 forecast were based on historical gold prices and the ratio of the Dow stock index against gold since 1970.

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$2,500 Gold Prices: Double Market Returns as China's Gold Fever Breaks Records (S.Alpha)

|  March 18, 2011  |

Inflation risk is driving "explosive" buying of physical gold in China, putting the country on a path to becoming the world's number one gold consumer and driving demand for the yellow metal to a 10-year high.

And the country's insatiable yearning for the precious metal could send gold prices to $2,500 in the next six months.

Chinese demand for gold bars and coins reached 180 tons last year, up a whopping 70% from the year before.

Chinese demand for gold jewelry hit an all-time high of 400 tons.

The country's gold demand nearly tripled in the last 10 years, and it could easily double again in less than a decade.

Currently, India is still the biggest market for gold, with total demand rising by 66% to 963 tons last year. But buying may slacken this year. The government is likely to increase import duties on gold in the forthcoming budget.

Gold imports by India climbed to a record of 918 metric tons last year, with Indians continuing to buy jewelry as a store of value.

Inflation Drives Demand Higher

Investment demand for gold in China was especially hot in the fourth quarter of last year, rising 84%. And the surge was mainly due to concerns about inflation.

The significant increase in demand seen in China, India and around the planet is reflective of the uncertainty facing consumers. People are buying gold to protect themselves from macroeconomic risks and rising inflation.

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Celente : Gold in 2011

Founder of Goldcorp Expects....

PDAC 2011: US$4,000 gold, 1,000 Dow

Peter Koven  March 7, 2011 – 7:33 am

The big bull market in stocks has done nothing to change Ian Gordon’s views. Mr. Gordon, who has made a name for himself as perhaps the ultimate stock market bear, maintained in his presentation that the Dow Jones Industrial Average is headed to 1,000, while gold is headed to US$4,000.

You read that right. Mr. Gordon, publisher of the Longwave Analyst report, is a believer in the so-called Kondratieff Cycle, which evaluates markets based on long-term trends. He believes we are at the stage when all the excess debt has to be flushed out of the system, leading to an utter collapse in the stock market.

“The whole system is collapsing, overweighted by a massive debt load,” he said, noting that total U.S. debt has reached about US$57-trillion. Once quantitative easing ends, he predicts disaster.

His advice? Put your money in gold. All of it. He sees no reason to go back into stocks until the Dow-to-gold ratio hits a ridiculous low (umm, apparently one-to-four qualifies).

He said that all of his assets have been in gold since 2000, and you have to give him credit: that was one great call on gold. For the sake of the rest of us, let’s hope he’s wrong about the stock market.

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Gold Rally Shows Investor Discomfort with Dollar and Euro: Greenspan (IBT)

March 4, 2011 2:43 PM EST

The US is grappling with its large budget deficit and controversial program of quantitative easing. 

To get a sense of what the market feels about all this, one can’t get the best picture by merely looking at the performance of the US dollar versus other currencies, said former Federal Reserve chief Alan Greenspan on CNBC.

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(Photo: REUTERS / Kevin Lamarque)
Former Fed Chairman Alan Greenspan ignored banking regulations and artificially lowered interest rates after the Sept. 11 attacks

Read more: http://www.ibtimes.com/articles/119048/20110304/gold-rally-dollar.htm#ixzz1EA6Tt7Ap

Against the euro, for example, the US dollar hasn’t seen a sustained decline because the two are “almost equally flawed” currencies, said Greenspan.

Gold, however, doesn’t suffer from the same problems. Greenspan said gold has acted as a universally accepted form of payment throughout time; its value doesn’t depend on changeable 

conditions like collateral, backings, or signings.

Against the euro, for example, the US dollar hasn’t seen a sustained decline because the two are “almost equally flawed” currencies, said Greenspan.

Gold, however, doesn’t suffer from the same problems. Greenspan said gold has acted as a universally accepted form of payment throughout time; its value doesn’t depend on changeable conditions like collateral, backings, or signings.

In fact, when currencies fail (like Germany's did in World War 2) , the market naturally reverts to gold as an instrument of payment.

Against gold, the US dollar has been falling rapidly in recent years.

This shows that there are investors who are uncomfortable with what’s going on in the US (and the euro zone). Moreover, foreign central banks are among the buyers of gold, which reveal their 

lack of confidence.

If the world's central banks do indeed move away from the dollar, it could spell doom for the currency.

Nevertheless, Greenspan doesn’t think society has shown any indication of wanting to go back to the gold standard or replace fiat currency with gold.

However, to get a sense of confidence in currencies like the US dollar, “watching the price of gold isn’t too bad,” he said.

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($1435) Gold Futures Surge to Record on Demand for Haven Amid Middle East Turmoil (Bloomberg)

By Pham-Duy Nguyen - Mar 2, 2011 1:04 AM GMT+0400

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Feb. 28 (Bloomberg) -- Jim Rogers, chairman of Rogers Holdings, talks about his investment strategy for global stocks and commodities. Gold advanced, approaching a record, as tensions in the Middle East boosted oil prices, increasing demand for precious metals as a protector of wealth and hedge against inflation. Rogers also discusses his strategy for the U.S. dollar. He speaks in Hong Kong with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Gold rose to a record of $1,435.60 an ounce in New York as unrest in Libya spurred demand for the metal as an investment haven.

Libya’s opposition gained support from the U.S. and European nations as Muammar Qaddafi sent forces to regain lost territory. Protests spread in the region, partly because food prices have soared. Crude oil in New York topped $100 a barrel today as Iranian protesters clashed with security forces in Tehran. Gold rose for the 10th time in 11 sessions.

“The continued violence in the Middle East is bringing in new buyers and spurring gold to new territory,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The rush to economic health is fading. Crude above $100 is an energy tax that will force governments to put more money into the system. Our old fear of stagflation returns.”

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