Gold to touch $2000+, Silver to hit $50+ in 2011: John Embry

NEW DELHI (Commodity Online @ MarketDhara.Com): Gold and silver price predictions continue to dominate the New Year headlines these days. While celebrated commodities investors like Jim Rogers have predicted that gold price would zoom over $2000 per ounce in this decade, several investment banks are forecasting gold price to be in the range of $1500-$1800 in the next five years.

John Embry, Chief Investment Strategist at Sprott Asset Management, has come out with his forecast on gold and silver for 2011. In an online interview to News MarketDhara, Embry--a leading voice in investment circles around the world--says gold price will touch $2000 and silver would hit $50 in 2011.

“I’d be disappointed if it didn’t trade through $2,000 this year, in that event if gold were to make a run at that, silver is a layup for $50,” he said.

Embry said that the returns over the last 10 years, gold returned over 18% and silver close to 24% annually. These are spectacular returns and we haven’t seen anything yet, we’re not even close to the third leg which is the blowoff.

“This may be the best opportunity you’re going to get at least from a price sense to buy gold and silver in the next few days. I think when this correction however long it will last is over, it will probably mark the lows for the year which will then be the liftoff to the eleventh consecutive year of higher gold prices," he said.

When asked once again about tightness in the silver market Embry remarked, “There is infinitely more demand for physical silver than there is supply. I mean all of this stuff coming out of the ground is long since spoken for by traditional industrial and medical uses and what have you. And now with investor interest picking up, I just saw that on the 3rd of January there was 1.7 million silver coins sold in the United States which was equal to the amount that was sold in all of the month of December. So, investment demand for silver is going off the chart, this could only mean dramatically higher prices.”

When asked about his themes for 2011 Embry stated, “Basically I think we are going to see more of the same. I mean I don’t see how you could possibly shut off the paper spigot without causing a depression, the likes of which would make the 30’s look like a picnic. If that’s the case then you’ve got to continue to focus on hard assets, and when you get these violent corrections...you’ve got to be in a position to buy them. The things that I would be avoiding like the plague are bonds, particularly long bonds.

...Things are sufficiently dire that I think we are going to have to recast the monetary system before this is over. And in such an undertaking I suspect that gold may be remonetized, and given the amount of paper there is in the world, I mean it will have to be remonetized at a price which would sort of stagger the doomsayers today on gold. There are still more people talking negative on gold today than there are positively believe it or not,” Embry added.