Goldcorp CEO Jeannes Sees Gold Price Floor Around $1,200Liezel Hill
Gold won’t dip much below $1,200 an ounce as Asian buyers help create a price floor, according to the biggest producer of the precious metal by market value.
Gold will probably trade in a range of about $1,200 to $1,400 in the next six to 12 months, Goldcorp Inc. Chief Executive Officer Chuck Jeannes said in a phone interview today. While continuing uncertainty about U.S. monetary policy will keep financial investors hesitant, physical demand will support prices, he said.
Gold futures in New York dropped 2.1 percent to settle at $1,198.60 an ounce, erasing gains for the year. The metal’s decline, combined with surprise third-quarter losses for Goldcorp and Yamana Gold Inc., pushed gold miners to their lowest in six years.
“When gold gets down around these prices we’ve seen demand, particularly from Asia, jump up,” Jeannes said. “That’s helping to provide a bit of a floor.”
Global gold production is facing a “sustained multiyear decline” and investors will prefer companies with low-cost assets capable of producing for many years, Jeannes said on his third-quarter earnings call today.
Goldcorp reported a surprise loss for the quarter, after costs rose and production was lower than analysts’ estimates. The stock dropped 13 percent in Toronto to C$20.85, the lowest price since October 2008. Yamana Gold, which also missed estimates, dropped 16 percent.
Barrick Gold Corp., the only large producer to report earnings that beat estimates this week, fell 4.1 percent, as the 30-company Philadelphia Stock Exchange Gold & Silver Index reached its lowest level since October 2008.