Newcrest Mining Ltd., Australia’s largest gold producer, expects prices for bullion will “stay strong” in the medium term supported by supply constraints and the metal’s appeal as a haven.
Gold may trade between $1,500 to $2,000 per ounce this year, Greg Robinson, chief executive officer of the Melbourne-based company, told reporters today at conference in Hong Kong. Bullion for immediate delivery last traded at $1,612.70 an ounce.
“If I look at the preconditions for the gold price in the medium term, I think about monetary supply, currency devaluation, interest rate, inflation, political economic drivers,” he told the conference. “I’m confident about the gold price. I expect them to stay strong for the medium term.”
Bullion has rallied for the past 12 years as nations pledged more stimulus to support economic growth and as central banks boosted purchases. Spot gold rose above $1,600 an ounce on March 18 for the first time this month after an unprecedented levy on bank deposits in Cyprus increased investors’ demand for protection of wealth.
“There’s more reasons to own gold today than there have ever been reasons to own gold,” Eric Sprott, the founder and chairman of Canadian fund manager Sprott Inc., said today at the conference. “I hardly think the crisis is over. The crisis is in full bloom.”
Newcrest shares closed unchanged in Sydney at A$22.50. The stock has gained 1.4 percent this year, compared with the 3.9 percent decline in spot gold.