Gold Fields sees bullion down to $500 in mid-term
Tue May 30, 2006 4:16 PM GMT168
JOHANNESBURG (Reuters) - The gold price is likely to fall to around $500 per ounce in the medium term, before resuming its long-term uptrend, South Africa's Gold Fields Ltd said on Tuesday
The volatile rally in the price has hit jewellery demand, which is a main driver of the price, Chief Executive Ian Cockerill told a strategy presentation.
"Clearly jewellery demand is critical for the maintenance of this upward trend...in the medium term, we would see the gold price setting at or around the high $400s to $500 an ounce."
The gold price rose by as much as 45 percent this year, peaking at $730 an ounce on May 12, but has fallen since then to trade at $654 on Tuesday.
The weakening in the price had let off some critical steam, which was positive, Cockerill added.
"I'm not unhappy that the price has come back, because clearly it did run away from itself," he said.
"We do believe that despite the recent pullback, the gold price is very much in its upward trend and in some respects the recent pullback was quite healthy."
Gold Fields, the world's fourth biggest gold producer, has operations in South Africa, Australia, Ghana and Venezuela.
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