First Asset Management Targets $2100 Gold Bullion

$2,000 gold? No problem, says First Asset Management's John Stephenson in an interview with The Gold Report:

The Gold Report: Merrill Lynch just came out with a projection for gold to hit $2,400 by 2014, based on QE3 and what may follow. That seems to be a pretty optimistic price projection from one of the big names in the investment business, if you compare that to where the Dow would go on a 35% move -- 18,500. It seems as if they may be being overly optimistic. What do you think? 

John Stephenson: I tend to agree with you. Could I see $2,000 or even $2,100 gold? Absolutely. It's fairly realistic to think that might occur in the next four to six months. The argument for gold is really that it is a currency and a hedge against the debasement of fiat or paper currency. But, in reality, that's not what's happening on the ground. The Fed is doing what it can but it's not increasing the money supply. All it is doing is buying up bonds, creating deposits at the Federal Reserve that member banks can access. The commercial banks are increasing their reserves, but until they start lending, there's really no multiplier out in the market and therefore the money supply isn't growing. Can it? Yes, but it depends on the credit health of Americans getting better, which thankfully it is. So, hopefully, we'll start seeing more lending and more spending in the economy, but right now that's not the case.

TGR: We'll have to see how realistic its projections are because Merrill Lynch is talking about all the way into 2014.

JS: That's a long way. We'll be a couple of more Money Shows down the road before we see on that one. Investors should look for higher gold prices but I think $2,000 is probably a more realistic target, within 6 to 12 months. 

More information can be found online at http://www.goldbullionadvisors.com