Silver to Jump 29% on ‘Crushing’ U.S. Debt, Coeur d’Alene Says
bloomberg.com
By Millie Munshi
Aug. 21 (Bloomberg) -- Silver prices will jump 29 percent by the end of the year as soaring U.S. debt spurs inflation, said Dennis Wheeler, the chief executive officer of Coeur d’Alene Mines Corp., the largest U.S. producer of the metal.
Demand from investors seeking a store of wealth accounts for more than half of silver’s 23 percent price jump this year before today, Wheeler said in an interview in New York. The metal will reach $18 an ounce with supplies little changed and demand buoyed by purchases from exchange-traded funds, he said.
“We have this crushing new debt and dollar weakness,” Wheeler said today. “The outlook for precious metals is very positive, and silver will be No. 1.”
The U.S. government has pledged $12.8 trillion, an amount that approaches U.S. gross domestic product, in a bid to stem the longest recession since the 1930s. The spending will erode the value of the dollar and boost the appeal of silver and gold as alternative assets, Wheeler said.
The metal will outperform gold in the next few years, Wheeler said. Before today, gold futures gained 6.5 percent in 2009.
Silver futures for May delivery rose 34.2 cents, or 2.5 percent, to $14.255 an ounce at 10:41 a.m. on the Comex division of the New York Mercantile Exchange.
The shares of Coeur d’Alene, based in the Idaho city of the same name, rose 60 cents, or 4.2 percent, to $14.97 in New York Stock Exchange composite trading. Before today, they jumped 63 percent this year.
“There’s a lot of anxiety out there over this debt,” Wheeler said. “Around the world, there are a growing number of investors who want protection. They’re going to want silver as part of their portfolio.”
To contact the reporters on this story: Millie Munshi in New York at mmunshi@bloomberg.net
Last Updated: August 21, 2009 10:46 EDT |
