Tags: Schiff | gold | bullish | 2012

Pete Schiff: Gold’s Rally is Far From Over

By Dan Weil   |   Wednesday, 04 Jan 2012 07:46 AM

Talk that gold’s 11-year rally has ended is overblown, says veteran gold bug Peter Schiff, CEO of Euro Pacific Capital brokerage firm.

Gold gained about 10 percent last year, but it dropped 10 percent in December, making many investors pessimistic about the precious metal.

But Schiff isn’t one of them.

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“I’m probably more optimistic about gold at the beginning of 2012 than I have been in some time,” he tells Yahoo.

(Associated Press photo)
While the December swoon caught Schiff by surprise, the flood of negative sentiment makes him bullish.

“We are seeing all sorts of calls by people who have nothing to do with the investment business about how the gold bubble is ready to burst,” Schiff says.

Short positions dominate the gold market now, creating the perfect climate for a rally, Schiff says. “This is a huge wall of worry, which I expect the gold market to climb,” he says. “I expect a very strong year.”

And gold miner shares, which fell while gold prices rose last year, should rebound, Schiff says. “2012 may finally be the year that gold stock investors are rewarded after several years of frustration.”

Some other experts share Schiff’s sentiment on gold mining shares. "Even if you weren't a gold bug, they look like good value investing," Leo Larkin, a metals and mining analyst at S&P Capital IQ, tells TheStreet.com.

He says gold bullion may revisit $1,900 an ounce this year. Gold futures for February delivery climbed 2.2 percent Tuesday to settle at $1,600.50.

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