Gold futures surged higher on Wednesday amid rising speculation that policymakers in the U.S. and Europe will soon implement further monetary stimulus measures.
COMEX gold futures – per the August contract – settled higher by $31.90, or 2.0%, at $1,608.10 per ounce. In doing so, the most actively-traded gold futures contract posted its best day since June 29th and extended its year-to-date gain to 2.6%.
The yellow metal also received a strong endorsement from Eric Sprott, founder of Sprott Asset Management and one of the most prominent gold bulls. In an article published today by Bloomberg, Sprott forecasted that the price of gold “should go to new highs before year-end.”
While he did not provide a specific target at this time, for the better part of the past decade Sprott has been very bullish on precious metals. According to data compiled by Bloomberg, his Sprott Hedge Fund has returned approximately 391% since its inception in 2000.
As for gold stocks, Sprott stated that they will most likely “do well” once the price of gold resumes its uptrend, but acknowledged that the shares “can’t get a sustained recovery until gold has a sustained recovery.”
Sprott went on to say that the European sovereign debt crisis “should be incredible for gold” over the longer-term, and noted that the world may eventually return to the gold standard. ”Ultimately, if there’s a currency crisis, which one could argue we are in the throes of it right now, how do sovereigns and banks back things up,” he posited. ”What do you back it up with? I can imagine that the most logical thing is gold.”
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