Gold to float to $800
Predictions. Goldcorp chairman sees value rising
Growing middle classes in China and India are stoking demand, Goldcorp's Ian Telfer told a Vancouver audience yesterday.
February 15, 2007
A deluge of paper money will float the price of gold to $800 US this year and spike it even higher down the road, Goldcorp chairman Ian Telfer says.
Gold's investment magnetism is strengthening as governments around the world scramble to print money, Telfer told a Vancouver Board of Trade luncheon yesterday.
"We're awash in liquidity and gold, in our view, is going to start to look more and more to people as a store of value and more and more like a currency," Telfer said.
"And it's the only one they can't print."
Telfer, who heads the world's second-largest gold company by market capitalization, warned his listeners that nobody in the gold business ever predicts that the price of gold is going down.
But, for the first time, production from gold mines has flattened out and is starting to fall, he said.
That decline is under way even as the growing middle class of China and India is stoking demand, he said.
"It has a different role in their lives than it does in ours," Telfer said. "It's a store of value. It's almost a currency.
"For us, it's more of an ornament."
Gold rose to its highest point in almost seven months yesterday as a decline in the value of the U.S. dollar boosted the metal's investment appeal.
Gold futures for April delivery rose $3.50 US to $672 an ounce on the New York Mercantile Exchange.
The metal climbed as high as $676.40 earlier in the day, its highest level in intra-day trading since August.
Vancouver-based Goldcorp acquired Reno, Nevada-based Glamis Gold last year in a $7-billion deal.
Goldcorp is on the lookout for more acquisitions -- but the days of buying junior miners are behind it, Telfer said.
"As a large company, the things that you look at acquiring have to be large," he said. "If we do anything, it's going to be one some type of a significant scale."
pluke@png.canwest.com
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