Newmont sees extended gold bull run
Matthew Hill
Published: 18 Oct 07 - 14:29
World number-two gold producer Newmont tells Mining Weekly Online that it
believes that the gold price, currently at record levels, will continue to
strengthen, and that the golden bull will continue to run “for a number of
years”.
Exchange-traded funds (ETFs), Asian jewellery demand, the deflating dollar, and higher oil prices were all giving the yellow metal’s price a leg-up to scale new record peaks.
“While the ETFs currently hold approximately $16-billion in gold, that does not account for the overall increase in the price of gold,” senior director of communications Omar Jabara said this week, in answer to emailed questions.
“Other factors such as increased jewellery demand in India, the Middle East and China are playing a role, as well as the weakening US dollar and the rise in the price of oil,” he added.
Jabara stated that Newmont remained bullish on gold and believed it would continue on its upward march, but did not say what levels he saw the precious metal reaching.
“We believe the bull market in gold still has a number of years ahead of it,” he commented.
Jabara detailed that a number of factors impacted on jewellery demand, including population growth, cultural factors, increasing affluence, and the need to protect one’s assets from inflation.
“In many countries, jewellery is more than just ornamentation, it is a way to store a family’s wealth, which is why many people ‘wear their wealth’ rather than trust banks, for example.”
While receiving record prices for their products, gold-miners were not without challenges.
“Newmont and our peers have struggled with rising costs, but we have begun the process of getting ahead of the curve,” Jabara said.
Jabara indicated that Newmont preferred openpit mining, and would likely only buy or build opencast mines going into the future.
“We are among the best in the world at openpit mining and seek to leverage that strength as we look at new projects and acquisitions,” he said.