Gold could hit $1,600 this year: Newmont

Tuesday, 14 June 2011 00:10 -     - {{hitsCtrl.values.hits}}

Newmont Mining Corp , the world’s No.2 gold producer, sees prices for the precious metal rising up to $1,600 this year and then above that next year, on growing demand from Asia’s burgeoning middle class.

Chief executive officer Richard O’Brien also said on Monday that the planned initial public offering (IPO) of the company’s Indonesian unit might be delayed to the middle of next year.

“Next year we could maybe get over $1,600 for a while,”  O’Brien told Reuters in an interview on the sidelines of a World Economic Forum event in Jakarta on Monday.

“Longer term, it’s still potential upside, depending on US dollar weakness, and a sustained building of the middle class in both India and China,” he added.

India and China, the world’s top two gold consumers, together consumed about 1,543 tonnes of gold jewellery, coins and bars in 2010, the World Gold Council says.

Spot gold traded at $1,530.59 an ounce on Monday, near a record-high hit in early May of $1,575.79.       

A Reuters poll of analysts in April showed expectations of prices reaching an average of $1,700 an ounce in 2015.

China and India are also major consumers of copper. O’Brien said that unless something happens to the two buyers, copper will be in “a pretty good trading range for the next several years”.      

“$4-$4.5 range (per pound) is a reasonable place for us to be for the next two years,” he said.       

Newmont runs the Batu Hijau gold and copper mine in Indonesia’s West Nusa Tenggara through its unit PT Newmont Nusa Tenggara. Last month, Newmont Nusa Tenggara’s chief executive Martiono Hadianto said the company planned to launch an IPO in the second half of this year.

However, O’Brien said the IPO might be delayed to mid-2012, as the company is waiting for the closure of an expected divestment of a 7 percent stake required under its mining contract. — Reuters