Gold to hit $1,350 - $1,400 by late Spring - John Embry

Speaking on the Mineweb Gold Weekly Podcast, Sprott Asset Management's chief investment strategist says while the yellow metal is likely to continue to consolidate over the next few weeks, the next major move will be up.

GRONINGEN - 

Gold should continue to consolidate over the next few weeks but, the next big move is likely to be up.

This is the view of Sprott Asset Management's chief investment strategist John Embry, who says he is looking for the price of the yellow metal to hit around $1,350 to $1,400 by late spring.

Speaking on the inaugural Mineweb Gold Weekly Podcast, Embry says the recent downward trend seen in the gold price is nothing more than a healthy correction.

"Gold had a 300 dollar plus run in US dollars from July into the early part of December and it has come under heavy pressure subsequently. It certainly has engendered immense bearishness amongst the commentators which is actually good from my perspective. I think the fundamentals are undisturbed and as a result it is setting up for another strong buy."

Asked about the link between gold and the US dollar, especially the recent strengthening of the dollar against the euro, Embry, says, while there is often a very clear link, the problems in the US and, by extension, the US dollar, are everywhere - especially given the huge budget deficit it is sitting with - so "the idea that one should run away from gold and into the US dollar because it is strengthening against the euro and several other currencies to me is actually preposterous.

"The idea that the US dollar is a safe haven today is flat out wrong," he added, "and that is going to be one of the major factors that are going to change the perceptions in the gold market going forward."

Another reason for Embry's conviction about bullion's next move, is the increasing role gold will play as a protection against monetary debasement.

"I think a lot of the world's wealth is figuring out that we have little choice given the debt problems in the world and the resultant unlimited creation of money and so I think there is a solid investment bid in the market for gold."

He adds, that concerns that have been raised about the possible impact the jewellery market is likely to have on the long term rise of gold because, he says, "all great bull markets in precious metals come from their reestablishment as money."

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responses to this article

hard bid? his article specified NO HARD BID FROM ANY ENTITY about some imaginary hard bid evidence. Very lame article. by vince nania on February 04 2010, 08:01 Find this comment inappropriate? Report it

Great Call Great call on the day that gold & silver fall through all supports. With the damage done to the charts hard to see that gold will come back from 1065 to 1350 in 3 months. by MSG on February 04 2010, 11:07 Find this comment inappropriate? Report it

Gold today and tomorrow Anyone who questions this today, when gold hit an air pocket, would have probably also questioned it yesterday, or last week. With all the US dollars being printed over the last few years and all they will print moving forward, there's nowhere else . .more for gold to go but UP. Besides where is the real support? Perhaps a little lower, right around the price where India bought all that gold last fall, seems like that was around 1045. It's your call, buy it or don't buy it, it really will not make a lot of difference one way or the other... . .less by Hypnomark on February 04 2010, 11:28 Find this comment inappropriate? Report it

Patience ... The man on the street is looking for security with his kids' college fund monies. Not to make a quick buck. Are there solid reasons one way or the other that gold or for that matter silver, will not have kept up with inflation 10-12 . .more years into the future? . .less by Franklin Halves on February 04 2010, 12:27 Find this comment inappropriate? Report it

RE: Great Call If gold moved up $300 in 4 months, it can surely move back up that much in 3. http://goldsilvercoinblog.com by GoldSilverCoinBlog.com on February 04 2010, 12:30 Find this comment inappropriate? Report it

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