The World Gold price has not peaked, and the steady emergence of the wealthy Chinese Middle Class will help boost the price in the long term toward US$2, 000 (my work show 1945.60 over the next 5 yrs or sooner), Richard O'Brien, CEO of Newmont Mining Corp. (NYSE:NEM) said Sunday.
In an interview, Mr. O'Brien said global Gold demand, and supply conditions are set to ensure that the Gold price will remains Strong over time, with the inherent weakness in the USD to continue as the US Congress shows no sign of taking control of the Country's budget problem, and the US Fed will have to continue printing money.
"I've got to believe that the USD goes lower over time," he said on the sidelines of the World Economic Forum on East Asia. "I'm a firm believer that the Gold price has not reached its peak, but it will remain volatile," he added. "Five years from now, US$2,000 Gold will probably be in reach," Mr. O'Brien said.
Next year, Gold will trade in a narrow range of US$1,500 to 1,600 oz, with the market focused on concerns about China's ability to sustain its expansion, and the potential for a Double-Dip recession in the US economy, he added. "That could be negative for Gold," but markets need to understand that whatever happens, the Gold price will remain above US$1,000 oz for the foreseeable future, he said. "People need to get with the program," he added.
Demand-side dynamics are set to remain Strong while global Gold supply tracks down off in coming years as projects become more expensive to develop and government approvals are harder to come by, and some central banks are also beginning to buy Gold again, he said.
Demand from both China and India for Gold as both jewellery and as an investment is set to be strong, he said.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
