Gold may reach $3,000 an ounce in the next two years as governments pursue economic stimulus programs, Canadian mining company Agnico-Eagle Mines Ltd. (AEM) said.
“I think we are going to still see liquidity, we are still going to see debasement of paper currencies,” Chief Executive Officer Sean Boyd said in a telephone interview yesterday. “That’s going to be reflected in a higher gold price.”
Gold futures for December delivery advanced 0.4 percent to $1,619.40 an ounce at 4:26 p.m. on the Comex in New York. The metal is up 3.4 percent this year, while the NYSE Arca Gold BUGS Index of 16 gold producers is down 18 percent. Boyd said gold equities are “bottoming” and may start outperforming the metal if bullion prices rebound later this year.
“I could see the valuations going up 50 percent from where they are in terms of multiple to underlying” net asset value, he said. “That really wouldn’t be a stretch.”
Agnico jumped as much as 10 percent today after reporting higher-than-expected second-quarter earnings. Profit excluding stock-option expenses and other items was to 40 cents a share, the Toronto-based company said yesterday in a statement after the close of trading. That compares with the 31-cent average of 16 analysts’ estimates compiled by Bloomberg.
The company raised its 2012 gold production forecast to about 975,000 ounces from 875,000 to 950,000 ounces. Cash costs will be close to the lower end of a previously forecast range of $690 to $750 an ounce.
Agnico rose 8.1 percent to C$42.09 in Toronto.
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