Euan Rocha and Julie Gordon
Metals consultant GFMS sees considerable upside in global precious metals prices as an investor safe haven, its Chairman Philip Klapwijk told the world's largest mining conference on Sunday.
Addressing the Prospectors and Developers (PDAC) conference in Toronto, Klapwijk said he saw a stronger case for investment in precious metals as a safe haven as demand for base metals declines due to slowing global growth and political turmoil.
He also said he expected global GDP growth to slow slightly this year as compared to last year.
Prices for gold and silver have risen sharply since the outbreak of violence in the Middle East and North Africa earlier this year as buyers turned to precious metals as a haven from risk.
Gold is holding within $10 of the record above $1,440 an ounce it set on Wednesday, while silver extended 31-year highs above $35.40 an ounce on Friday.
JPMorgan analyst Michael Jansen told a room packed to overflowing with more than 500 delegates -- from corporate chief executives to geologists to fund managers -- that he expects average gold prices in 2011 to move even higher than that, at $1,465 an ounce.
His year-end target for gold is $1,500, he said, adding the gold production outlook was strong going forward.
The outlook for mine supply continues to be very strong, at least for the next few years, he said. We think mine supply is easily on track to grow 3 to 4 percent year on year.
Klapwijk said gold and other precious metals will also get some impetus as investors exit other traditional safe havens.
We expect the sovereign debt crisis will not be confined to Europe and it will eventually spread to the U.S. and Japan ... It seems to be inconceivable that the U.S. will be able to continue on its current path and maintain its 'AAA' rating, Klapwijk added.
More than 20,000 people are in Toronto this week for the annual PDAC conference. Attendance grows every year at the event, a key barometer of mining investment appetite that this year has also attracted a handful of top government ministers from key mining jurisdictions.