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Gold price headed north of $2 000/oz, even $5 000/oz – gold bull McEwen

TORONTO (miningweekly.com) – NYSE- and TSX-listed McEwen Mining chief owner Rob McEwen has plenty of faith that the gold price will, within the next two years, head north of $2 000/oz and even cross the $5 000/oz mark in the not too distant future.

In an interview with Mining Weekly Online, McEwen said that while there was a lot of sentiment out there that the gold price would go lower, he believed the price of the yellow metal would go much higher.

McEwen pointed to historical precedents where governments debased their currencies through monetary expansion in excess of their sustainable debt loads, which caused the currency to devalue relative to assets such as gold.

In the past, these happened in isolated cases, but were more commonplace these days, as many countries and regions, including the US and the European Union, were concurrently pumping cash into their economies to keep them buoyant.

In some cases, as in the US, debt was reaching unprecedented levels at around $17-trillion. He said it worked well when interest rates were low, but should rates climb to about 5%, the debt service costs alone would be about a trillion dollars, which would crowd out other essential public services.

When confidence in a currency is lost, political casualties result and investors move to physical assets to preserve value. The strong demand for physical gold from the East was also a positive pulling factor.

Gold rebounded in recent weeks, but at around $1 274/oz, the price is still selling for well below the $1

Article source: http://www.miningweekly.com/article/gold-price-headed-north-of-2-000oz-even-5-000oz-gold-bull-mcewen-2013-07-17

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