From The Gold Report:
A lackluster U.S. economy is creating a positive environment for gold, according to Michael Fowler, senior mining analyst with Loewen, Ondaatje, McCutcheon Ltd. By calculating ounces-in-the-ground values and assessing risk, Fowler has concluded that the junior/midtier sector offers the best growth potential. He expects to see companies of all sizes try to control costs instead of looking for mergers and acquisitions to add value. Read on in this Gold Report interview for Fowler's take on companies that he believes fit the bill.
The Gold Report: Michael, in August you said $2,000/ounce (oz) gold would push up equity prices in 2013. Are you still of that mindset?
Michael Fowler: Yes, although it has taken longer than I expected. The U.S. dollar price of gold was up 6.2% in 2012, but the real increases in the gold price took place in other currencies. For example, in 2012 gold was up about 15% in the euro. The strengthening U.S. economy has been a headwind to gold. I remain bullish on gold and am keeping my $2,000/oz average for 2013.
TGR: A $1,675/oz gold price would require an increase of almost 20% to reach $2,000/oz. Will it require a downturn in the U.S. economy to accomplish that?
MF: To some degree, I hope the U.S. economy will not speed up because that would be a major risk to my analysis. The U.S. economy is relatively lackluster. We think the Fed will continue with quantitative easing and increasing the money supply. Interest rates will continue to be low. All of that creates...
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