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Barrick is back making excuses for hedging
From Reuters
Thursday, June 9, 2005
http://www.reuters.com/financeQuoteCompanyNewsArticle.jhtml?
duid=mtfh72369_2005-06-09_17-24-25_n09664886_newsml
NEW YORK -- The price of gold should rise to $525 an ounce by the
start of 2006, a top executive of gold giant Newmont Mining Corp.
said on Thursday.
Pierre Lassonde, president of the world's largest gold mining
company, cited an expected decline in the U.S. dollar by another 15
percent against a basket of currencies, world economic growth strong
enough to keep physical demand buoyant, and a continuing gradual
decline in gold output.
Speaking at the Reuters Mining Summit, Lassonde said consumer and
investor demand for gold is tenacious at current prices and world
production is in a decline, which should hoist gold out of a
current "$400 to $475 range."
"When you add it up, we think you can see gold at $525 by Jan '06,"
he said to reporters at Reuters offices in New York.
"The physical market is very strong at these prices. There is
enormous demand," Lassonde said.
Investors are buying gold as well, in favor over the euro and the
dollar, he added, with bullion making its way into vaults in
Switzerland and heading into the Middle East, India, China and
Turkey.
"Those are the big markets right now," said Lassonde.
Newmont expects gold production to fall by 0.5 to 1 percent this year
and next, while the company's own output growth, as the leading
worldwide producer, should be 4 to 5 percent over next three years,
the executive said.
Spot gold changed hands at about $424 an ounce at midday Thursday,
down 4 percent since the start of the year.
A dip below $425 in the last month was primarily due to slowing
demand for jewelry from India after the busy March-to-May wedding
season and decreased buying by Italian jewelers before summer
holidays begin in July, he said.
Still, the market has recovered from repeated attempts to press it
below $415 because of solid demand, said Lassonde.
Bullion hit a 16-year high of $456.75 last December on the back of a
falling dollar, which tends to make the U.S. currency-priced metal
cheaper for non-U.S. investors.
"We believe that the dollar trade-weighted index has another leg down
to go, another 15 percent, mostly against the Asian currencies. We
think we're going to see a great deal of that happening in the next
nine months.
"If we see a revaluation of the (Chinese yuan), I would think gold
sales would increase even more substantially" throughout Asia,
Lassonde said.
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