Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (40643)	9/23/1999 9:23:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116791

Thursday September 23, 3:42 am Eastern Time INTERVIEW-AngloGold sees less gold forward selling By Kenneth Barry HONG KONG, Sept 23 (Reuters) - Forward gold sales by producers and hedge funds, which has depressed the price, should decline in future, AngloGold Ltd Chief Executive Bobby Godsell said on Thursday. That change and flat or declining new mining production over the next three to five years should contribute to gold's climb back above 20-year lows, Godsell said in an interview. In addition, Britain's latest sale of gold reserves, which sparked a rally, has helped the market realise central bank sales would not be nearly large enough to fill gold's supply-demand gap, he said. Godsell said he expected forward selling to decrease because of higher gold leasing rates. The rise in rates from historical levels of one percent to 3.5 or four percent recently has changed the dynamics of forward selling, Godsell said. ``If the interest rate contango diminishes, there is less value to be found in futures. I would expect less gold to be sold forward,' he said. The narrowing interest rate differential was also putting pressure on hedge funds holding large short positions, Godsell said. ``If prices continue to move as they are, some people are going to be in difficulty,' he said. Godsell predicted flat to declining new mine production in the next three to five years because of recent low prices. ``That is also positive for the price,' he said. The AngloGold executive said Asian demand would contribute to gold's price recovery. ``The fundamentals for gold are very sound with the return of economic growth in this part of the world,' he said. Godsell said Japan, Thailand, South Korea and Hong Kong showed signs of recovery. ``These are major markets,' he said. Godsell said he expected the price to move higher as the market realizes potential central bank gold sales will never fill the gap between supply and demand for gold of 1,200 tonnes annually. ``This market will return to a physical demand and physical supply equilibrium which really should be at a level considerably higher than US$264,' said Godsell, whose company is the world's largest gold producer. With that equilibrium the gold price should rise to US$300 to US$350 an ounce, Godsell said. AngloGold was looking for gold mine acquisitions and expected consolidation in the industry, Godsell said. ``We are looking at acquisitions. We would like geographical diversity and mining diversity,' he said. The objective would be to replace low-margin production with high-margin production. ``Our target is a $50 profit margin on each of our seven million ounces of production. We are pretty much there,' he said. Godsell was in Hong Kong to present awards for gold jewellery designs in a competition sponsored by the company and the World Gold Council. Spot gold was quoted at US$263.40/90 an ounce at 0430 GMT. biz.yahoo.com