Sean Boyd, CEO of Agnico Eagle, is not exactly one of the speakers on the stock market. In recent years, he has continued to develop Agnico and the company is growing organically. Compared to the CEOs of other gold companies, Boyd himself rarely makes forecasts. But on the occasion of his company’s strong quarterly figures he then gave a forecast for the gold price to the news agency Bloomberg.
In his view, gold has the potential to reach a new record high above the $2,000 mark in the next two to three years. Above all, the uncertainties surrounding the further development of the global economy should help the price of gold. But also the high government spending, which is based on debt, is likely to drive the gold price upwards. In addition, he sees strong purchases from China, India and the largest gold purchases by central banks since the early 1970s. All this leads Sean Boyd to expect a further rise in the price of gold. Looking ahead to Agnico Eagle, Boyd said he wanted to use the higher cash flow resulting from the stronger gold price to increase the dividend and further strengthen the balance sheet. The Agnico share gained over six percent yesterday after the company clearly beat analysts’ expectations.
Sean Boyd is certainly right when he points to the bullish environment for gold. Gold itself sent a signal yesterday that the next rally phase may have already begun. With the breakout from the bullish flag the first piece of the puzzle is there, a rise above 1,505 dollars would be the first confirmation that the bulls have taken the helm again. A breakout above $1,526 would increase the likelihood that the bulls are actually on their way to a new annual high.