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John Paulson: Gold Could Hit $4,000 an Ounce

Wednesday, 04 May 2011 10:13 AM

Gold could hit $4,000 an ounce over the next three to five years, says hedge-fund manager John Paulson. Gold is currently trading around $1,500 an ounce.

The United States and the United Kingdom have flooded their respective economies with money in order to fuel a more-robust economic recovery.

That rush of money will apply inflationary pressures on those economies, making gold poised to the hit the $4,000 mark in a few years, Paulson says, according to The Wall Street Journal.

John Paulson, head of the hedge fund that bears his name, was the top-earning manager of 2010, according to AR Magazine.

gold200APuseme.jpg
Gold has hit record highs.
(AP file photo)
He raked in $4.9 billion in 2010 thanks to bets on gold at Paulson & Co., shattering his record in 2007, when he earned $3.7 billion by betting that housing market was about to collapse.

Precious metals have been soaring lately, as investors buy them as a hedge to volatility in currency markets.

"There’s been a resumption of sovereign risk worries in Europe, safe haven buying related to Japan and more recently, discussions over U.S. debt," says James Steel, precious metals analyst at HSBC in New York, according to the Financial Times.

Silver is trading at over $49 an ounce, its highest level since a supply squeeze in 1980, prompting some to point that a correction is due.
In fact, silver has gained more than 160 per cent in the past year thanks in part to heavy individual interest.

"Should that retail interest in silver slow down just a little bit, we would expect prices to correct quite sharply," says Suki Cooper, precious metals analyst at Barclays Capital, according to The Financial Times.

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Gold could hit $4,000 an ounce over the next three to five years, sayshedge-fund manager John Paulson. Gold is currently trading around $1,500 an ounce. The United States and the United Kingdom have flooded their respective economies with money in order to fuel a...
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