Gold can climb to at least $2,650 by year end: Alamos Gold CEO

Gold futures (GC=F) retreating on Friday but not before hitting a fresh record high.

The precious metal up nearly 20% this year amid safe-haven demand. Gold’s appeal to investors giving producers like Alamos Gold (AGI) a lift. The company's CEO says John McCluskey says the company is seeing "great production across all of our assets adding that "just about the time the gold price takes off, our production's taking off and our costs are going down."

As for where gold is headed next? McCluskey says the metal could reach levels of at least $2,650 by the end of the year, with prices being fueled by geopolitical unrest, central bank buying, and concerns about the US debt.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend

This post was written by Ivana Freitas.

Video Transcript

It's been a solid year so far for gold reaching another fresh record today, investors look into the precious metal for safety amid economic concerns, rate cut hopes and geopolitical risks, the moves higher in gold giving producers like Alamos a lift the company reporting record production in the second quarter.

And joining me now is Alamos CEO and President John mccluskey John.

It's good to see you.

So you did report results uh this week, John Eps and sales coming in above estimates your stocks up about 30% this year.

It's up about 50% here over the past 12 months, John I'm interested um in the quarter, John, what, what drove the business wa walk us through it or just having a great production across all of our assets.

We have um we have three producing mines right now and our mine in Mexico which uh we call mulattos.

It, it had one of the best quarters it's ever had.

Uh We have a, an operation, an operation in Ontario called Island Gold.

We were mining uh one of the highest grade zones at that mine that we've ever mined.

In fact, the um the, the scopes were reconciling positive.

We were um scheduled to mine around 12 g and we ended up mining uh around 14.4 g. So we're getting better grade, higher production and that's driving, you know, record cash flow low costs.

Uh We're getting effectively some of the um some of the best performance uh that we've ever seen.

And, and that's obviously resonating with the market just about the time the gold price takes off, our production is taking off and our costs are going down.

And I think what the market's looking for is that margin expansion.

And that's exactly what we're delivering right now.

And, and just more broadly, John, you know, just let's talk about the medal.

I mean, the kind of strong run gold has had this year, John, just see these successive records.

What is driving that in your opinion?

Well, for most of the past year, it's been driven by central bank buying and that's mostly out of Asia.

And um lately though, I think it's a combination of things, I think it's a combination of uh political uh upheaval in the world.

I mean, there's, there's um there's been an ongoing war in the Ukraine.

Now.

There, there is uh now added to that uh growing unrest in the Middle East, that's certainly been a contributing factor.

But on top of that, we're getting into the later stages of the, of the political uh uh the the election cycle in uh in the United States and I, I believe, you know, they're, they're talking more and more about the uh the the exponential growth of the uh of the US debt.

You know, it's hit 35 trillion and you know, it's growing at a record pace and I think this is, this is starting to um instill some some real fear in the minds of investors and ultimately, that is um is uh turning their attention towards gold.

So this is the part we ask you to take out your crystal ball John, if you don't look ahead now, you know, near, you know, intermediate term, where do you see gold prices headed?

No, I was asked that question um about uh two years ago and oddly enough, I, I settled on $2400 an ounce two years ago.

It was about 1800.

So it's uh from then till now it's, it's up just about 30% where it's going.

Now, it's, it's clearly in, in an uptrend.

It's been in an uptrend really since uh it, it bottomed in 2016, things turned around for gold in 2017 and it's been heading in an uptrend since.

And you know, it's a sawtooth pattern.

It, it's very typical for gold.

But in point of fact, uh you know, gold is uh in a solid uptrend and I, I think we're gonna see, you know, levels like 2650 at least by the end of the year.

That's that's what I, where I think it's going John.

So great to have you on the show today.

Appreciate it.

Have a great weekend.

All right.

Thank you.