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Agnico Eagle CEO Ammar Al-Joundi said Monday that the historic surge in gold is built on forces that are far from fading.
In an interview on “Mad Money,” Al-Joundi told Jim Cramer that while short-term price swings are impossible to predict, the structural drivers behind gold’s 80% rally over the past year – that has now pushed the metal above $5,000 per ounce for the first time ever – remain firmly intact.
“Who knows where it’s going to be next week or next month,” Al-Joundi said. “The fundamentals that have pushed gold up are still there — government spending, now add to that the catalyst we had a couple years ago with Russia invading Ukraine and getting kicked out of the SWIFT [payments] system. And now a new catalyst, which is this ordered world we lived in seems to be becoming less ordered, and that obviously has an impact on ... the monetary markets, and gold is playing its role in that.”
Central banks in countries such as China are also rethinking their allocations to U.S. Treasurys and buying more gold, he noted. And with minimal supply growth each year and new mines taking at least a decade to build, Al-Joundi said he expects gold supply to remain tight. “You’re not going to see gold flooding the market,” Al-Joundi said.
