Jan 26, 2008 04:30 AM
DAVOS, Switzerland–Record gold prices, which scaled a new peak yesterday, could easily go higher, says the chair of the world's largest gold producer, Barrick Gold Corp.
Peter Munk said he was no "gold bug" but told Reuters the outlook was more positive today than at any time in the past decade.
"With increased demand and constrained supply, I'm more convinced (the price) is not only sustainable but may even reach the highs in the 1980s," he said at the World Economic Forum.
Gold hit a high of $924.30 (U.S.) an ounce yesterday after a power crisis shut South African mines. The price is the highest ever in nominal terms but is still not equivalent in real terms to the peak of $850 reached in 1980.
"Today's adjusted price would be in the $2,000 bracket," he said.
My HUI Gold Bugs Index setup is giving a second renewed bullish call, based on the "dumb money" small traders sharply cutting their net long position as a percentage of the total open interest. In silver, the large speculators (also the dumb money) are building up their net long position to somewhat excessively bullish levels, but so far so good; they haven't reached the historic extremes I'm looking for in order to flip me to bearish silver. Alex Roslin
A new bull market for the Japanese Yen
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