In an interview with King World News, Sean Boyd of Agnico Eagle stated that he expects gold to hit $3,000.
Why?
Boyd notes that at the onset of the financial crisis, governments unleashed tremendous amounts of stimulus to prop up the economy.
However, this also caused gold prices to surge from $700 to around $1,900.
And with major economies like China slowing, Boyd thinks another round of stimulus could trigger a similar move.
““We’ve seen the first large stimulus coming out of China. So if we get more stimulus globally, that has the potential to take gold from the $1,600 range, to the $3,000 range, which would be akin to the move from $700 to $1,900.
So that $3,000 an ounce gold number is certainly not out of the question, given the weakness in the overall global economy, and the serious issues around debt which is going to result in more stimulus, and as a result debasement in paper currencies.
When they (central planners) talk a different story between austerity, and stimulus only if needed, I think the reality is stimulus is needed, and we will see stimulus in one form or another coming out of Europe and the Fed. On the back of what we’ve just seen in the last few days coming out of China, it’s all going to be important for the gold price going forward.
Boyd also warned of reduced supply, which could be one of the main drivers for a huge bump in the gold price.
Business Insider – August 30, 2012