U.S. Global Investors Sees Gold Prices Doubling
Source: Reuters (4/5/11)
"Big corrections still possible, but the odds favor a doubling gold price 'unless there is a complete slowdown in the world.'"
Crude oil prices, which surged to a two-and-a-half-year high above $121 for Brent LCOc1 on Monday, will continue to climb until at least September when the Atlantic hurricane season typically begins, said Frank Holmes, chief executive and chief investment officer of U.S. Global Investors.
U.S. Global Investors is an investment management firm specializing in commodities, emerging markets and infrastructure with around $3 billion in assets.
"You get these trends that can last many months. Right now, we are in a rising trend for oil," Holmes told Reuters on the sidelines of a commodities conference.
"As car season picks up and people are driving more in the U.S., then you see oil prices rise until September, which is the start of the hurricane season. I think between now and then oil will probably be a strong commodity."
He believes that economic growth in emerging markets, especially China and India, will boost the countries' middle class and translate into purchases of cars and homes, which will drive oil and commodities demand.
"In the next five years, oil can double and I think gold can double because 50% of the world's population is growing their money supply by more than 15% a year," Holmes said.
"That doesn't mean you are not going to get big corrections, but the odds favor it unless there is a complete slowdown in the world."