DJ Major Gold Producers Expect Price Rebound Despite Iraq!!
Enviado: 21/3/2003 12:3103/20/2003
Dow Jones News Services
(Copyright © 2003 Dow Jones & Company, Inc.)
PERTH (Dow Jones)--Two of the world's biggest gold producers said Thursday that the bullion price will rise in coming months, despite recent selling linked to the start of the Iraqi conflict.
U.S.-based Newmont Mining Corp. (NEM), the world's biggest producer, and South Africa's Gold Fields Ltd. (GFI), the fourth largest, said the price recovery will be largely linked to concerns about the U.S. economy.
Analysts say that the so-called war premium in gold has vanished over the past few weeks as investors take the view that the U.S.-led war in Iraq will be successful and short-lived. Uncertainty over the Iraqi situation had helped propel gold prices to more than U$380 an ounce early this year, but in Asian trading Thursday the metal fell to a three-month low of US$331.75 as demand for safe-haven buying waned.
But Ian Cockerill, chief executive of Gold Fields, said that there is still an "overwhelmingly positive" argument for buying gold in an economic environment where the U.S. dollar is predicted to soften further. "The war is an event that is taking place, but it is superimposed on what is a weakening U.S. economy," he told reporters at the Paydirt gold conference in Perth.
"America has been on a spending binge and at some stage someone has to pay for that, and that is going to lead to the reality that the dollar is overvalued," he added. "And if you believe in a weakening U.S. dollar then, by definition, you should believe in an improving gold price."
Cockerill said investors are betting that the war will finish swiftly. "But I don't believe that we are going to see any real change in the global financial markets - the seeds for real economic problems are there and are likely to stay there."
John Dow, managing director of Newmont Australia, said that the gold price has lost some of its war-related glitter in recent weeks. "But underlying that are the fundamental financial conditions that are going to keep the price of gold probably somewhere where it is now, or maybe even (cause) further increases," Dow said.
"We are in a long-term upward trend and the forces that are causing it are only getting worse," he added.
"You might see a short-term price reaction (downwards) in a matter of days, but longer term the U.S. economy isn't going to be fixed overnight and the debt crisis that is looming in the U.S. isn't going to go away."
Both Gold Fields and Newmont have made major investments in Australia's gold mining sector in recent times. Newmont last year completed its A$4.5 billion takeover of Normandy Mining and Gold Fields paid US$233 million purchase for WMC's gold assets in late 2001.
Newmont last year produced 1.7 million ounces of gold in Australia, out of its total output of 7.6 million, and is looking to expand production further.
Dow said that Newmont expects to finish a feasibility study on its 44%-owned Boddington gold project in Western Australia by the third quarter of this calendar year, and "be ready to take a decision" on its development.
He added that Newmont has no plans to sell its stake in Boddington, which is a joint venture with AngloGold Ltd. (AU) and Newcrest Mining Ltd. (A.NEW). "It is absolutely a core project," he said.
-By Stephen Bell, Dow Jones Newswires; 61-8-9245-6408
-Edited by Ian Pemberton
(END) Dow Jones Newswires
03-20-03 0412ET
Scuba
Dow Jones News Services
(Copyright © 2003 Dow Jones & Company, Inc.)
PERTH (Dow Jones)--Two of the world's biggest gold producers said Thursday that the bullion price will rise in coming months, despite recent selling linked to the start of the Iraqi conflict.
U.S.-based Newmont Mining Corp. (NEM), the world's biggest producer, and South Africa's Gold Fields Ltd. (GFI), the fourth largest, said the price recovery will be largely linked to concerns about the U.S. economy.
Analysts say that the so-called war premium in gold has vanished over the past few weeks as investors take the view that the U.S.-led war in Iraq will be successful and short-lived. Uncertainty over the Iraqi situation had helped propel gold prices to more than U$380 an ounce early this year, but in Asian trading Thursday the metal fell to a three-month low of US$331.75 as demand for safe-haven buying waned.
But Ian Cockerill, chief executive of Gold Fields, said that there is still an "overwhelmingly positive" argument for buying gold in an economic environment where the U.S. dollar is predicted to soften further. "The war is an event that is taking place, but it is superimposed on what is a weakening U.S. economy," he told reporters at the Paydirt gold conference in Perth.
"America has been on a spending binge and at some stage someone has to pay for that, and that is going to lead to the reality that the dollar is overvalued," he added. "And if you believe in a weakening U.S. dollar then, by definition, you should believe in an improving gold price."
Cockerill said investors are betting that the war will finish swiftly. "But I don't believe that we are going to see any real change in the global financial markets - the seeds for real economic problems are there and are likely to stay there."
John Dow, managing director of Newmont Australia, said that the gold price has lost some of its war-related glitter in recent weeks. "But underlying that are the fundamental financial conditions that are going to keep the price of gold probably somewhere where it is now, or maybe even (cause) further increases," Dow said.
"We are in a long-term upward trend and the forces that are causing it are only getting worse," he added.
"You might see a short-term price reaction (downwards) in a matter of days, but longer term the U.S. economy isn't going to be fixed overnight and the debt crisis that is looming in the U.S. isn't going to go away."
Both Gold Fields and Newmont have made major investments in Australia's gold mining sector in recent times. Newmont last year completed its A$4.5 billion takeover of Normandy Mining and Gold Fields paid US$233 million purchase for WMC's gold assets in late 2001.
Newmont last year produced 1.7 million ounces of gold in Australia, out of its total output of 7.6 million, and is looking to expand production further.
Dow said that Newmont expects to finish a feasibility study on its 44%-owned Boddington gold project in Western Australia by the third quarter of this calendar year, and "be ready to take a decision" on its development.
He added that Newmont has no plans to sell its stake in Boddington, which is a joint venture with AngloGold Ltd. (AU) and Newcrest Mining Ltd. (A.NEW). "It is absolutely a core project," he said.
-By Stephen Bell, Dow Jones Newswires; 61-8-9245-6408
-Edited by Ian Pemberton
(END) Dow Jones Newswires
03-20-03 0412ET
Scuba