McEwen, Goldcorp Founder, Bets Crisis Will Drive Gold to $5,000
By Stewart Bailey
Feb. 11 (Bloomberg) -- Goldcorp Inc. founder Rob McEwen, whohas more than $100 million in gold investments, said he expectsthe metal to top $5,000 an ounce as governments increase themoney supply to combat recession.
Bullion will more than double to $2,000 an ounce by the endof next year before rising to McEwen’s target by the end of thecycle, which could take an additional four years, the investorsaid.
“Politicians around the world are listening to cries fromtheir electorates and they’re giving money to all callers,”McEwen said yesterday in a telephone interview from Toronto.
McEwen, who founded what is now the world’s second-largestgold producer by market value, owns stakes in three Canadianprecious-metal explorers worth more than $100 million. He said healso has a “big, big” holding in bullion. Gold gained for theeighth straight year in 2008 amid investor concern the economywould collapse and government efforts to prevent that wouldincrease inflation.
Gold futures for April delivery rose $29.10, or 3.2 percent,to $943.30 an ounce at 11:51 a.m. on the Comex division of theNew York Mercantile Exchange, the highest for a most-activecontract since July 23. The metal climbed to a record $1,033.90on March 17.
McEwen said he started buying bullion in August 2007, at thebeginning of the subprime mortgage crisis. Gold has jumped 40percent since Aug. 1 of that year, touching a high of $948.20today, while the Standard & Poor’s 500 Index has dropped 43percent.
“I realized we had reached an inflection point regardingmoney,” McEwen said. “It was all about protecting money, andgold served that purpose.”
McEwen is the largest shareholder in Lakewood, Colorado-based U.S. Gold Corp., Vancouver-based Rubicon Minerals Corp. andSpokane, Washington-based Minera Andes Inc. Vancouver-basedGoldcorp is the world largest gold producer by market value afterToronto-based Barrick Gold Corp.
-- Editors: James Langford, Kevin Orland
To contact the reporters on this story:Stewart Bailey in New York atsbailey7@bloomberg.net.
Last Updated: February 11, 2009 12:27 EST