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Newmont upbeat on gold

Richard O’Brien,
President & CEO,
Newmont
 
Melbourne, Australia — MININGREVIEW.COM — 02 October 2009 – The world’s second-largest gold miner “’ Newmont Mining Corporation “’ expects investment demand to support the price of gold bullion, but says there is a small risk that gold could sink to around US$800 an ounce if economic recovery stalls.

“If the recession stays around for a couple of years, we could see gold come back to the US$800 range,” Newmont chief executive Richard O’Brien told a business luncheon here.

“But I don’t think that is likely to happen,” he emphasised. “I think we will see inflation come through in the next few years. If that happens we can see gold above US$1 200.”

O’Brien went on to say that the most likely scenario was that rising investment demand would lift the price of bullion further.

Reuters reports that gold was almost flat around US$1 000 today, after it had fallen in the previous session on a higher dollar, with investors awaiting the release of key U.S. non-farm payrolls data for further direction.

Inflation fears are probably premature, said Sydney-based gold analyst Tony Parry of Resource Capital Research..

“Inflation is not likely to be a sustained gold price influence until mid-2010,” Parry said.

“The first quarter crisis-driven demand for gold-backed exchange-traded funds almost evaporated in the second quarter, with an 88% fall in funds inflow,” he added.

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