Hedge Fund Guru Sees Gold Price Soaring

The following is a piece from from Jim Sinclair a day or so ago, who is the host of a web site called Jim Sinclair's MineSet in our humble opinion its well worth the time spent on reading what he has to say. The above link will take to his site and his updates via email are free, so you have nothing to lose by signing up for them.

DAVOS, Switzerland—In the current uncertain environment, one hedge fund guru is in no doubt where investors should put their money – gold.

The fund manager, who wishes to remain anonymous, was unequivocal in his belief and was bullish on the longer-term outlook for the value of the precious metal: “Thousands of dollars per ounce,” he says. “Thousands.”

By the end of 2012, he sees the price of gold at between $2,000 and $3,000 per ounce. Even the bottom end of that range would represent a handsome gain. On the New York Mercantile Exchange Thursday, gold was trading at $1,726.10 per ounce.

“Gold is at the intersection of money trends,” says the hedge fund boss. “The only non-fake money is gold.”

The investor says there are lots of ways to get low-risk exposure to gold if there is a sustained loss of confidence.

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Comments

[John Ell]

On the gold issue I may be a contrarian. If something sounds too good to be true well.......
A cache of metal in a quantity one can afford makes sense but I wouldn't bet the farm
Unless you can watch it all day every day. I wonder what the miners' stocks will do when the gold price soars?
John

[Gold Prices]

Hi John,

First up is you are right and it would need constant monitoring via a new vehicle such as a newly formed company or a fund.

Secondly, the mining stocks, we are not as bullish as our peers as the stocks should be rallying with gold prices as high as they are, however, they are range bound between 500 - 600 on the HUI. This is not 1980 and the choice in terms of gaining exposure to this bull is much wider than it was then, so cash can be deployed without it going into stocks.

Without 3 or 4 to1 leverage against the gold price, we do need to ask - Is it worth the risk?

At the moment we don't think so.

Have a good one,

Bob