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Rangold CEO Says Emerging Markets, Supply Limits, May Boost Gold

Release Date: 
Monday, March 11, 2013

Gold edged slighting higher today in morning trading with bargain hunting lending support.  The yellow metal was $0.70 higher at 8:27 a.m. Pacific Time on the New York Spot Market, at $1,580.90 per ounce.  Spot silver was $0.15 lower at $29.95 per ounce.  (Click here for the most current spot prices.)

There are signs that physical gold buyers, particularly top importers from India and China, saw a bargain in the market's recent consolidation, Barclays analysts said in a note. "The physical market continues to respond to the lower prices."

"There is a wait-and-see attitude and gold is likely to remain range-bound this week as there are no key policy announcements and the economic data is mostly second-tier," Societe Generale analyst Robin Bhar said.  "A lot will depend on the dollar, which the metal is likely to track in coming days."

Jim Wyckoff, senior analyst at Kitco.com noted bargain hunting at current levels, but said a firmer U.S. dollar index that is hovering near a seven-month high is limiting the demand for gold and silver priced in dollars.

Rangold Resources Ltd., a major gold miner, believes that gold may rise as central banks in emerging markets buy the precious metal and producers limit new production of gold.  The gold market is showing signs of inelasticity, supply is tight and production costs are high, Chief Executive Officer Mark Bristow. 

“I still believe there’s more upside than downside in the gold price, particularly if the industry is going to be driven to make those hard decisions,” Bristow said.  “I don’t think there’s much room to go below $1,500 this year and I still believe there’s every potential for it to go $200 above that.”

(Sources:  “Gold futures edge up, but stay below $1,580,” Marketwatch, March 11, 2013; “PRECIOUS-Gold edges up but firmer dollar weighs,” CNBC, March 11, 2013; Comex Gold Gains in Quiet Trade as Chinese Inflation Rises,” Wall Street Journal, March 11, 2013; “Randgold CEO Sees Upside for Gol d on Central-Bank Buying,” Bloomberg, March 7, 2013)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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