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Sean Boyd - Expect $2,200 to $2,400 Gold & $60 to $75 Silver
With gold above $1,600 and silver over $40, today King World News interviewed one of the top CEO’s in the mining world, Sean Boyd, Vice Chairman of $11 billion Agnico Eagle, to get his thoughts on the gold and silver markets. When asked about the action in gold Boyd stated, “As we started the year, we were anticipating getting to these levels. I think earlier in the year we said we would see $1,600 gold and $50 silver. It might take a bit of a breather here, but even before the summer started the conventional wisdom was that we were in a traditional quiet period, which is really sort of a North American driven phenomena.”
Boyd continues:
“I don’t think that holds anymore because the buyers of gold, and a lot of them are coming out of the far east, don’t really care that it is July or August, they are buying. Gold has been really resilient, anytime we get a pullback we seem to get some buying interest. Certainly we seem to have had a little bit of a bump here on the crisis around the debt ceiling in the US. As they solve that you may have some weakness in gold, but I think the long term trend is still up.
I could see it next year up 25% to 30%, and that’s simply based on the solid fundamentals where we are seeing increasing demand. We’re seeing products being created that is helping to facilitate that demand, and we are seeing an inability on the part of miners to produce much more gold. Also, the central banks are not supplying gold to the market, they are actually buying gold. So all of those things are going to continue to propel gold higher as we move through the balance of this year and into next year.
I think if we look out in the 12 to 18 month time frame we will be in the $2,200 to $2,400 area on gold and we could be $60 to $75 on silver. I don’t think that is too outlandish given where we are now, given the fact that mostly in gold’s case we have had a steady rise for 10 years.
There is just tremendous interest and there is more wealth being created. The reality is that in the big picture the politicians won’t make the tough decisions to reign in spending. They are going to continue to supply liquidity to the market and it’s really a Richard Russell Dow Theory ‘Inflate or die.’ That’s where we are and that’s why gold is benefitting and will continue to benefit under that scenario.”
When asked about the mining shares specifically Boyd remarked, “I absolutely agree that the equities relative to gold are undervalued, I think that’s clear, that’s just a fact! If you look at where the equities are trading, they are at the low end of the historical range of values. We’ve had periods over the years where gold tends to lead, then the equities regain leadership. The equities have not regained that leadership over the last couple of years.
We need to see some things happen in order to realize higher equity valuations. I think what the market is looking for, they want M&A deals that are consistent with stated strategies. They also want to see some of the money flow back to them in the form of dividends. I think a good signal that the gold industry needs to send is higher dividends. That will demonstrate a confidence in their own businesses, and that is coming because there is tremendous cash flow being generated.”
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
Eric King
© 2011 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
July 21, 2011
