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Gold Industry Leaders See New Highs Within 12 Months

by Michael Locklear

BoA September 13, 2012 – Gold price increase predictions are coming from both banks and leaders of the gold mining industry. Although slightly more conservative than recent predictions from UBS and Bank of America, the CEOs of three major gold producers are predicting that within the next year the price of gold should rise to near $2000 per ounce. This follows on similar predictions from banking leaders although their timeline is a little more extended. The Denver Gold Forum took place this week and several mining executives were interviewed. Their remarks reflect their reasonable expectations that gold will continue to rise although perhaps not as rapidly as others might expect.

Citing widespread anxieties on the part of investors, concerning the growing instabilities in the, world economic environments, and the growing risk of increased inflation, along with a diminishing supply of gold from producers, the heads of Barrick Gold Corp., Gold Corp. Inc., and Newmont Mining Corp. have expressed their optimism that the price of gold will continue to be on the rise in the foreseeable future.

Gold continues to increase in price as it has for the past 11 years. As of 1:30 EST today it has risen over $35 to $1770 an ounce. Its previous peak was last year on September 6 when it topped out at $1923 an ounce. Then, as now, investors are pushed towards gold by their continued anxieties over inflation and currency devaluation and are continuing to seek a safe haven for their investment dollars. This is further fueled by increased concerns over risks in the stock market and the stability of treasury bonds.

To add to these concerns, the new players in the investment market for gold are central banks from multiple countries around the world who have recently been stockpiling gold and moving away from the U. S. Dollar and U. S. Treasury Bonds in their efforts to seek more stability. Their massive move on gold reflects their greatest involvement in the precious metal since 1964. Reports indicate that they will continue their practice of moving into gold and away from the dollar over their concerns of increased inflation.

A recent decision by the German Constitutional Court, which supported The European Stability Mechanism, saw the dollar tumbled further down in value, prompting even more concern about currency instability and assurance of coming increases in inflation. Investors are currently anxiously anticipating the Federal Reserve’s next move in relationship to further quantitative easing.

Although it is unlikely that the world will soon return to a new gold standard, it is clear that gold as a collateral is a new direction for many central banks. These actions along with the current run on gold by investors and reports that gold supply is down by as much as 19% over this past year, only further supports the widespread predictions that gold prices will rise substantially in both the near and long-term future.

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