On a day when gold hit a 17-week low of US$1,590 an ounce, Canadian hedge fund manager Eric Sprott was holding firm to his prediction that prices are headed much higher soon.
Speaking to CNBC, the CEO of Toronto-based Sprott Asset Management said he expects gold to hit US$2,000 an ounce by the end of this year. He also reiterated his earlier forecast that the price of silver will also exceed $50 by the close of 2012.
“Gold was the investment of the last decade. It blew away any investment you could make, including Microsoft Corp. (NASDAQ: MSFT, Stock Forum) and Berkshire Hathaway Inc. (NYSE: BRK.A, Stock Forum) (NYSE: BRK.B, Stock Forum), probably by a factor of 500%,’’ Sprott told CNBC’s Halftime report.
When it was pointed out to him that Berkshire Hathaway Chairman Warren Buffet and Berkshire Vice-Chairman Charlie Munger were not fans of gold, he responded by saying: “I don’t know that I should respect their opinion at this point in time.’’ "So in other words they missed the trade, big time."
Sprott admitted that gold is in “a bit of a funk at the present time.’’ “I was a little surprised that gold reacted negatively yesterday (Tuesday) because the physical data is so overwhelmingly in favour of gold.’’
The fund manager said he is encouraged by news that physical gold exports from Hong Kong to China went up 600% year-over-year in March.
In last nine months, the Chinese have been massive buyers of gold, he said.
“The people who sell paper gold and silver can rule the markets over the short term. But in the long run, I think the physical participants will rule the day,’’ Sprott said.
Shares of Sprott Inc. (TSX: T.SII, Stock Forum) fell 2.37% to $4.12 Wednesday, leaving the company with a market cap of $698.9 million, based on 169.6 million shares outstanding.