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Gold Will Hit $1,500 By June 2010: Strategist

Gold Bars
AP
Gold Bars

Gold prices hit another high on Wednesday, briefly touching $1,100 an ounce. Can anything stop the bull run? Patrick Chidley, senior mining analyst at Barnard Jacobs Mellet, and Jonathan Kleisner, principle and managing director of investment strategies at REX Capital Group, shared their views.

“You’d certainly look to buy on dips,” Kleisner told CNBC.

Kleisner said he is looking to invest in dollar futures along with adding onto gold positions. He added that he expects gold prices to reach $1,500 an ounce by June of 2010.

“You’ve got to look at this as a real breakout commodity," he said.

“So you look to buy the dips and if you’re initiating a gold position, you have to think about buying some dollar index futures as well.”

In the meantime, Chidley said while gold prices could dip slightly, gold stocks are not really pricing in the current price at $1,100 an ounce.

“I’m keen on some of the gold stocks—there’s good leverage in these stocks,” he said. “We estimate 3 percent for every 1 percent move in gold price itself.”

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

Chidley said the gold bullion is a more conservative way of getting exposure to the commodity.

“Buying stocks comes with additional risk, but with the leverage that you get and also as gold prices go up, the address of a market of those gold companies, in terms of what they can do with their assets, improve as well,” he said. “So things get better for them.”

Chidley Likes:

Randgold Resources

Royal Gold

Newmont Mining

Barrick Gold

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Disclosures:

No immediate information was available for Kleisner or his firm.

Chidley has investment banking clients who own shares of GOLD.

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