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Agnico Eagle CEO - The Price of Gold is Bottoming Here
With gold around the $1,600 level and silver trading near $30, today King World News interviewed Sean Boyd, CEO of $11 billion Agnico Eagle. When asked what he sees happening with the global crisis, the price of gold and the mining sector, Boyd responded, “We sort of sit back here in the business of producing gold, looking out at the financial landscape and we continue to tell ourselves that nothing has really changed here. The fundamental issues globally still have not been addressed and our theory all along has been that the only way out of this debt mess is to print our way out of it.”
© 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 This material may not be published, broadcast,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.
September 26, 2011
Sean Boyd continues:
“There is increasing pressure to deal with it in a more concrete way and the answer (from politicians and central planners) will be more liquidity and that’s going to be helpful for the price of gold and silver. As producers, and across the industry, no one is panicking. These are still great businesses at $1,600 gold, and although we have seen higher prices we will get back to those levels. This has been a drastic overreaction.
Right now, the reality is that there is tremendous demand for physical gold because of its anti-paper properties. People across the world are suspicious of governments and unsure of their ability to deal with the situation. So when we break it down it down, we see localized inflation and India and China increasing wealth.
As you know, the people of India and China like to have their savings in gold, which is why India and China combined take down half of what is produced globally on an annual basis. Going forward, we could see consumption from India and China increase to 2/3 or even 3/4 of global mining production as we move out over the next two or three years. So that is going to underpin the market here....
Continue reading the Sean Boyd interview below...
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“The other floor in the price of gold from an industry perspective is the, ‘All in cost.’ Costs to produce are close to $1,100 across the board in the industry. So when you add a little bit of profit or return to that you are in the $1,500 range, that’s what we got close to this morning, with some overreaction in the market. I think we are right around the bottom here.
Large buyers that were looking to get positioned in the metal have a great opportunity to buy right now and I think you are going to see those entities show up to buy. We already know that there are central banks that are underweight gold that would like to own more gold reserves for diversification purposes and they will take this opportunity to make purchases. So again, I would suspect this is the bottom.”
When asked about silver specifically Boyd responded, “Well, silver has been pounded. When we saw silver outperform gold on the upside, we could expect on the downside it would do the same. Silver will be back at the $50 level in the future, so I wouldn’t be too worried on the silver side.
We haven’t seen the third and final phase of the bull market in the precious metals. They will have their best performance in that final blowout phase.”
© 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
