Posted on 12/06/2010 10:23:30 PM PST by Jet Jaguar
DESPITE THE BURST OF POPULARITY for gold in the past year and the increase in the commodity's price, one investor who has followed the space for more than 15 years thinks prices still have room to rise.
Mark Johnson, co-portfolio manager of the USAA Precious Metals and Minerals Fund (USAGX), says investors can get more bang for their buck by putting their money in gold miners than in investing in the commodity itself.
Johnson's fund ranked first in its category over the past 10 years, according to Morningstar. We spoke with him last week about what metals companies he likes now.
Barrons.com: What's your outlook for gold?
Johnson: We think that the main current themes are basically the themes that have been in place all year. Interest rates are likely to remain lower for longer because of economic weakness, and real interest rates at the short end of the curve are likely to remain negative. That's a very positive environment for gold. The second major positive for gold, and we don't see this changing anytime soon either, is that sovereign-debt issues are tremendous incentives for governments to pursue inflationary policies, which is also positive for gold. And finally we think there are significant imbalances in the world that have been highlighted most recently in the G20 meeting, which will ultimately require currency adjustments. That would argue for the U.S. dollar moving down against the Asian currencies in general, excepting the Yen, and the Chinese currency in particular. Those three factors basically create a very positive environment for gold. I would say that if we have a reservation on a metal at this point, it would be silver. Silver has had a tremendous run.
(Excerpt) Read more at online.barrons.com ...
Goldbug ping.
I bought NSU in October of 2008. It’s up over 1300% from that point. I still think it’s a well-managed company with high-quality reserves.
http://www.google.com/finance?hl=en&q=%22NSU%22&rlz=1B3GGLL_enUS393US393&um=1&ie=UTF-8&sa=N&tab=we
Has NevSun even produced an ounce of gold? Amazing how so many gold junior juniors have HQ in Vancouver Canada. Everybody must know each other there. You did good so far so what can I say.
Agnico Eagle (AEM) seems like a great company and stock.
SLW
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