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

To: Crimson Ghost who wrote (80556)	1/8/2002 10:51:28 AM
From: Alex	Respond to of 116764

INTERVIEW: Gold To Avg $289/Oz In 2002; Up 6.6% - GFMS By Jim Hawe Of DOW JONES NEWSWIRES TOKYO, Jan. 7 (Dow Jones) - A top official with Gold Fields Mineral Services Ltd. said he expects gold will rise gradually and average $289 a troy ounce in 2002 due to improving demand and a growing reluctance to short the metal. The average price of $289/oz will be a solid improvement over the $271.08/oz average for 2001, said Paul Walker, director for the London-based precious metals consultancy and research firm. "We are mildly optimistic about the prospects for gold in 2002 due to the improving supply and demand dynamics," he said. At 0643 GMT, spot gold was trading at $278.25/oz. Spot gold opened Monday in Hong Kong at $278.55, down from $279.15 late Friday in New York. Walker said much of his optimism stems from the assumption that the resilient U.S. dollar, which has been gold's primary nemesis over the past year, will surrender some ground against the euro and other major currencies in 2002. As gold is denominated in U.S. dollars, a weaker U.S. dollar tends to spur global demand for the metal by making it more affordable in terms of local currencies. "I think we will also see some more buying by institutions in 2002. It may be on a small scale, but that's still better than the heavy selling seen in recent years," said Walker. Despite gold's inability to hold onto its post Sept. 11 price gains to just under $300/oz, Walker said investors shouldn't discount its role as a safe haven in times of crisis. "The limits of the global financial system (after Sept. 11) haven't really been tested. Governments have made more money available to avert disaster and gold has been somewhat pushed aside," he added. Supply May Tighten In 2002 Walker said the U.S.-led war against terrorism, the Argentine debt default and some of the other clouds forming on the 2002 horizon could "cut both ways" for the gold market by making bullion and other hard assets more attractive to investors, while at the same time hurting economies and leaving "less money in your pockets to buy gold." However, Walker said the consolidation in the mining industry and a growing reluctance among miners to hedge future production should help to tighten supply in 2002. When asked about the ongoing bidding war between Denver-based Newmont Mining Corp. (NEM) and South Africa's AngloGold Ltd. (AU) for the right to takeover Australia's largest gold producer Normandy Mining Ltd. (A.NDY), Walker agreed with the sentiment shared by most on the market that a Newmont victory would be a plus for the price of gold. "Clearly Newmont would be better than Anglo for the price of gold - one is a known hedger of gold, while the other has a policy against hedging," Walker said. Walker added the environment for shorting bullion in 2002 could be much less hospitable as gold lease rates appear to be on the rise. "You would have to be a very brave individual to short gold in the current environment. We see strong support around the $270-level and expect that more gains are now to be made on the upside," said Walker. Jim Hawe, Dow Jones Newswires; 813-5255-2950; jim.hawedowjones.com -------------------------------------------------------------------------------- Copyright © 2001 Dow Jones & Company Inc. All rights reserved. sg.biz.yahoo.com