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Hedge Fund Manager Sprott Sees Gold at $1,500 in 2010 (Update1)
Feb 5,2010 09:05CST
industry news
Source:SMM

Feb. 4 (Bloomberg) -- Eric Sprott, whose Sprott Hedge Fund increased more than fivefold in nine years, said gold may rise to $1,500 an ounce this year and $2,000 within two years as the U.S. government takes measures to counter the credit crunch.

"With quantitative easing and the financial problems we have, I suspect that the gold price goes up from here," Sprott said today in an interview in Toronto, where he announced financial support for Canadian athletes.

"If you tell me how much quantitative easing there is, I'll tell you where the gold price will go, but I have no trouble imagining we get to $1,500 this year and to $2,000 in two years."

Sprott said in a Dec. 18 interview that the Standard & Poor's 500 Index will collapse below its March lows as an expected rebound in economic growth fails to materialize. Gold rose 22 percent in New York in the two years ended yesterday as investors bought the precious metal as a safe haven during the global economic recession.

Gold futures for April delivery fell $44.30, or 4 percent, to $1,067.70 an ounce at 12:01 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest decline since Dec. 4.

Sprott's C$1.39 billion ($1.3 billion) Sprott Canadian Equity Fund, which has gained about 18 percent in the past six months through yesterday, has 34 percent of its portfolio in mining stocks and another 39 percent in bullion as of Nov. 30.

Olympic Support

Sprott, 65, founded his current company in 2001 after divesting Sprott Securities, now Cormark Securities Inc., to its employees.

Speaking at a press conference today, Sprott said his company will give C$100,000 to a fund that supports Canadian athletes for each gold medal won by a Canadian at the Vancouver Olympic Games this month. Money raised will go to the Canadian Athletes Now Fund, a non-profit organization that supports athletes competing in international competitions including the Olympics.

"It's so spectacular when a Canadian wins a gold medal, and there's probably hardly any feeling you can have that's more special than somebody accomplishing that," Sprott said.

The hedge fund manager also donated C$210,000 to the Canadian Athletes Now Fund to help cover expenses incurred by Canadian athletes competing in Vancouver, Jane Roos, the fund's founder, said in the press conference.

 

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