Coeur d’Alene Mines’ CEO Dennis Wheeler recently stated he “would not be surprised” if gold is trading in the $1500-$1600 and silver in the mid-$40s per ounce price range by the end of the year.
Speaking at the Reuters Mining and Steel Summit last Thursday, Wheeler says increased instability through political turmoil and natural disasters is increasing demand for gold and silver investments.
Last Thursday, gold reached a new record high of $1447.20 per ounce before retreating back to around $1430 as of this writing on Tuesday, 3/29. Silver reached its all-time high of $38.13 per ounce, the highest since January 1980. Much of this recent activity is attributed to the unrest in Libya as well as the expectation Portugal may soon require a bailout to stay solvent.
Of course, not all analysts and industry experts share Wheeler’s view.
For example, Hulbert Financial Digest founder Mark Hulbert says he thinks there’s over-confidence in the gold markets considering the average gold market exposure to a subset of short-term investors is at a staggering 67%!! That means over 2/3 of their portfolio consist of gold and the other 1/3 cash.
So at least in the short run, analysts like Mark Hulbert think gold is due for a cool down.
He still concedes though that as a long-term investment, it’s still good to have gold in your portfolio.
And considering the outlook for the next several years, we definitely agree that increases in the gold price will definitely involve a rocky road. If it were a straight vertical rise, that would be different and other analysts who think gold is definitely in a bubble would be correct in our opinion.
But considering increasing food and energy prices and other economic factors reminiscent of the 1970s, many large and small investors are increasingly seeing gold and silver bullion as the kinds of investments to really consider in times of instability.
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