Wednesday, 5th April 2006 (6249 views)

South African gold mining corporation Gold Fields has claimed that there is scope for the price of the precious commodity to rise even higher than recent record levels.

John Munro, Gold Fields' business development director, told the Perth gold conference that there was a "substantial upside in the gold price from where it is today".

He cited several positives to look at in order to sustain this, including a healthy outlook for jewellery consumption in two of the world's largest markets, India and China.

Mr Munro tempered his comments with warnings of a false dawn, claiming investors wanted to see monetary returns for their capital, rather than just investing in the largest miners.

"This is not a price contest environment just to add ounces," he said. "The ultimate proof of the gold sector's current performance can only be measured in the share price of its participants."

Mr Munro's comments were lent weight by a comment later at the same conference from Martin Pyle, corporate finance director at Australian broker Hartleys, who claimed that the trading price of gold could top A$1,000 an ounce.

However Mr Pyle also had a stark warning for the gold market, noting that although central banks have raised interest rates to curb inflation "they may not yet have done enough to quell investment demand for gold as a hedge against possible harder times ahead".

"The heated price environment is directly linked to increasing global inflation," the Hartleys director claimed.

 

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