Wednesday, May 16, 2007

$2000 gold by 2010?

Can gold breach the four digit mark by 2010? Check out Bloomberg's interview with Rob McEwen of U.S. Gold for a replay of Rob's forecast.

Key points:

1. Investment demand has started to trump jewelry demand in the gold market.

2. Gold is money.

3. Central bank selling of gold was dominant at the beginning of the decade near gold's price bottom; selling has stopped and been replaced with central bank purchases of gold.

4. Mine production has fallen off. McEwen expects production to rise as the gold price increases, but notes that new supply is taking longer to develop and has been more costly to produce.

Check it out.