Gold to crest $1,600, says mining CEO

By Alix Steel, TheStreet

Updated at 4:44 p.m. ET

Gold prices could break the $1,600 an ounce mark this year according to Sean Boyd, chief executive officer of Agnico-Eagle Mines (AEM).

Boyd is among the many mining executives attending the attending the 20th BMO Capital Markets Global Metals & Mining Conference in Florida this week, and believes "gold will ultimately go above $2,000.”

“I think it’s going to go in steps, so I could see $1,600 this year, which means $40 to $45 silver," Boyd told TheStreet.

Gold for April delivery surged Tuesday, rising $21.30 to settle at $1,431.20 an ounce at the Comex division of the New York Mercantile Exchange. Gold traded as high as $1,431.50 and as low as $1,409.80 during Tuesday's session.

Gold prices also got a boost from rising oil prices and comments from Fed Chairman Ben Bernanke about inflation and the impact of rising commodity costs. In his semi-annual monetary policy report to the Senate Banking Committee, Bernanke reiterated his expectations for modest inflation in the near-term and hastened to assure that the central bank was keeping a close eye on commodity prices.

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"The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation -- an outlook consistent with the projections of both FOMC participants and most private forecasters," Bernanke said in a statement. "That said, sustained rises in the prices of oil or other commodities would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored."

Stocks took a tumble as rising oil prices and Bernanke’s words worried investors. The Dow Jones Industrial Average ($INDU) dropped 168 points, or 1.4%, to 12,058. The S&P 500 ($INX) fell 21 points, or 1.6%, to 1,306, and the Nasdaq ($COMPX) lost 45 points, or 1.6%, to close at 2,737.

Gold mining stocks, a risky but sometimes more profitable way to invest in gold, rallied with the metal even as broader equities sank. Newmont Mining (NEM) closed up 1.5% at $56.09, Barrick Gold (ABX) climbed 1.8% to $53.77 and Angico-Eagle gained 2.5% to finish at $72.08.

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Silver prices continued to soar as well, rising 61 cents, or 1.8%, to settle at $34.43. Among silver stocks, Silver Wheaton (SLW) rose 2.4% to $43.58 and Silver Standard Resources (SSRI) rallied 3.8% to $28.17.

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