Gold to Hit $1,350–$1,400 by late Spring - John Embry

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". . .recent downward trend seen in the gold price is nothing more than a healthy correction"

The next big move for gold is likely up, according to Sprott Asset Management's John Embry. He says he's looking for the gold price to hit around $1,350 to $1,400 by late spring.

Speaking on the inaugural Mineweb Gold Weekly Podcast, Embry says the recent downward trend seen in the gold price is nothing more than a healthy correction.

"Gold had a $300 plus run in USD from July into early part December, and it has come under heavy pressure subsequently. It certainly has engendered immense bearishness amongst the commentators, which is actually good from my perspective. I think the fundamentals are undisturbed and as a result it is setting up for another strong buy."

Asked about the link between gold and the USD, especially the recent USD strengthening against the euro, Embry, says, while there is often a very clear link, U.S. problems and, by extension, the USD, are everywhere —especially given the huge budget deficit—so "the idea that one should run away from gold and into the USD because it is strengthening against the euro and several other currencies to me is actually preposterous.

"The idea that the USD is a safe haven today is flat out wrong," he added, "and that is going to be one of the major factors that are going to change the perceptions in the gold market going forward."

Another reason for Embry's conviction about bullion's next move is the increasing role of gold protecting against monetary debasement.

"I think a lot of the world's wealth is figuring out that we have little choice given the debt problems in the world and the resultant unlimited creation of money and so I think there is a solid investment bid in the market for gold."

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