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Fund Manager Davies: Gold Ready to Surge 28 Percent

By    |   Tuesday, 05 Apr 2011 11:48 AM

Gold hit a record high of $1,447 an ounce last month, and more big gains are in store, says Ben Davies, CEO of Hinde Capital, which manages Hinde Gold Fund.

If gold climbs back above $1,440, it could reach $1,840 by year-end, he tells CNBC. That represents a 28 percent jump from its current level of $1,434.

“Gold is doing what is should do, maintaining its purchasing power in a very difficult environment,” Davies says.

The precious metal is “absolutely” cheap on an inflation-adjusted basis, he says. “There’s been a war against gold. Governments don't want to see the price of gold going up, because it's showing that you're debasing your currency."

gold200.jpg
Gold bars (Getty photo)
Gold represents a threat to the fiat currency system, Davies says.

“That’s part of the reason why it’s been rejected by portfolio managers around the world. Let’s not have this view of it being a barbaric relic.”

Gold is both a commodity and money, he says. “So it’s a great tool to have in your portfolio.” Investors should really have a minimum of 30 percent of their portfolio in gold, but you can start with 10-15 percent, he says.

Davies isn’t the only gold bull.

"In the next five years, … gold can double because 50 percent of the world's population is growing their money supply by more than 15 percent a year," Frank Holmes, CEO of U.S. Global Investors, told Reuters.

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Gold hit a record high of $1,447 an ounce last month, and more big gains are in store, says Ben Davies, CEO of Hinde Capital, which manages Hinde Gold Fund. If gold climbs back above $1,440, it could reach $1,840 by year-end, he tells CNBC. That represents a 28 percent...
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Tuesday, 05 Apr 2011 11:48 AM
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