, IncMarch 9, 2010 – According to John Embry, Chief Investment Strategist at Sprott Asset Management, gold prices are likely to rise 30 percent or more this year as government policy and spending could lead to hyperinflation.
When asked about his prediction, Embry said, “I would say at least 30%. I said that I thought it would be the best year to date. We've had nine years consecutive higher year-end gold prices and the best year in that span for a year's return was 31%. I think this will be the year that we exceed it in this, the 10th year of the bull market.”
He believes that investor confidence is building because a greater number of people understand the financial danger in the US. “(The US) government spent dramatically more money and the results are a budget deficit I never thought I'd see in my life. I'm shocked at the numbers.” He continues by saying, “When you can't depend on your government paper as a safe haven, I think that fact puts gold in a much better light in more people's eyes.”
Regarding hyperinflation Embry says, “I think the far greater risk is hyperinflation because I believe that these guys that are in control today have seen the depressionary '30s, and they will move heaven and earth to prevent that outcome.”
Embry finishes by saying, “When inflation rears its ugly head and I suspect that will be sooner rather than later, the market will force interest rates higher in the US.” When this occurs, investor confidence will likely push gold prices much higher.
Stewart Lawson
Senior Staff Writer - GoldPrice.net
