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Eric Sprott Sees $2,155 Gold, $64 Silver This Year

By David Bond, Editor

Vancouver, B.C. " Eric Sprott, CEO of Toronto-based Sprott Asset Management, forecast a gold price of $2,155 by spring of this year, but said Monday the real action will be in silver, which he predicted might hit $64 per ounce before 2012.

“Gold was the investment of the last decade, and silver will be the investment of the next,” Sprott told an SRO audience at the Cambridge House Resource Investment Conference, attended by about 5,000 so-called “retail investors” and 400 mineral exploration and production companies.

Sprott Asset Management moved into precious metals in the year 2000 because, Sprott said, he and his market analysts sensed a coming bear market in non-commodity securities. He said he now sees silver as concluding a 30-year price consolidation in the wake of the Hunt brothers' failed effort to corner the silver market in the late 1970s.

Sprott Asset recently set up a silver exchange-traded fund that required the purchase of 15 million ounces of physical silver. “It took two months to buy 15 million ounces or silver. How can that be, when 500 million ounces of silver trade every day in the COMEX? The silver market makes no sense,” he said.

Sprott said more money is now spent on silver for investment purposes than on gold. He said the current silver-to-gold price ratio of 48:1 is not sustainable given that fact, and said he expects the ratio will return to its historic 16:1 spread.