Gold price slips as traders weigh outlook for Fed interest rate cuts
Bullion traded near $2,626 an ounce in thin trading after closing 1.1% higher on Friday.
While there is disagreement over the near term direction of the gold price, Rob McEwen and Chuck Jeannes former and current chiefs of Goldcorp, almost agree on its longer term prospects.
McEwen told the Gold Report an interview why he thinks gold is heading to $5,000: “Gold is money. It is currency. I think the number of people familiar with gold will grow as people see gold as a currency. China, India, Russia are buying gold to diversify their foreign reserves. To restore the confidence in currencies, I think some central banks, such as the Chinese and possibly the Russian, will increase their gold holdings to the level that the percentage of their total currency will be greater than that of any other currency in the world. At that point, they will assert that their currency should become the reserve currency of the world.
Reuters spoke to Goldcorp CEO Chuck Jeannes on Friday who suggested the precious metal may be ripe for a brief retreat: “Whenever we start to see these very large, near parabolic moves in the price it does make me nervous. I would prefer to see a more steady measured growth in the price like we’ve seen over most of the last 10 year. What it means is there will be a correction at some point – that is natural and that is actually healthy for a market.” Despite the likely pullback, the stage is set for gold to breach its inflation-adjusted record high of $2,400 an ounce in the near future, Jeannes said.
MINING.com rounded up views of analysts, traders and mining executives on the prospects for gold after the precious metal reached another peak in Saturday trading in India, the world’s largest consumer of the precious metal, bringing it to within reach of the psychologically important level of 30,000 rupees. Bullion is already up more than 30% in 2011, after a decade of annual gains.
2 Comments
The Mafiaman.
“Gold’ always has been the “Gold stanard”! So now, look at it very, very, carefully I did and I might say that the “Swiss” and their banking system have been very good to me to say the least!……Dav, “The Mafia Man”.
jamesont
In other words, the gold standard will be coming back into its own, as people return to the historical tangible expression of real wealth.