Monday, May 9, 2011

Gold May Rise to $2,000 as Alternative to Currency, Sprott Says

May 9 (Bloomberg) -- Gold may climb to $2,000 an ounce this year as investors buy the metal instead of holding currencies, said Eric Sprott, chairman of money manager Sprott Inc.

Gold will rise by at least 17 percent this year, Sprott said today in an interview during the New York Hard Assets Investment Conference. The metal averaged $1,228.45 an ounce last year on the Comex in New York and ended 2010 at $1421.40.

"It's gone up 17 percent a year for the past 11 years; I'm sure it will do that as a minimum," Sprott said. "It could easily hit $2,000 this year. That wouldn't be out of the question."

Gold has risen for 10 straight years and reached a record May 2 in New York as demand increased from investors seeking an alternative to the U.S. dollar. Silver has climbed for nine of the past 10 years and reached a 30-year high of $49.845 on April 25.

Sprott has lauded gold and gold stocks for at least a decade, and his company offers products for investors seeking to own precious metals.

Silver prices will rebound and jump above $50 on surging investment demand for the precious metal, which also has industrial and photographic uses.

"I see huge amounts of money moving in the physical silver market, almost as much as gold, so I think the price is going to go up faster than the price of gold," Sprott said. "I suspect we'll be back through $50 not too far from here."

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