Friday, 9th June 2006 (2972 views)

Leading gold producers have told Reuters they expect the high price of gold will not give way to a slump in value.

While many think the current prices may stabilise, experts speaking at the Reuters Global Mining and Steel Summit in New York agreed the trajectory of the gold price would continue to stay at a high level.

Newmont Mining chief executive Wayne Murdy told the news agency: "We think there's still a long way left in this run.

"You look at the investment interest that gold has generated, and as an industry we've made investing in gold modern with the Exchange Traded Funds (ETF)."

ETFs offer a price-indexed product to gold, without the need for physical material and the associated costs of storage and insurance.

For AngloGold Ashanti chief executive Bobby Godsell, the demand from both consumers and investors had helped shore up the price and would continue to do so.

"Jewellery demand provides the floor of the price range and investment demand provides the ceiling," he said.

"I think that gold is going to hold its ground as an alternative store of value for institutions. […] It would seem to me that a prudent person would continue to make a bet on gold for part of their wealth," he added.

The price of gold has reached 26-year-highs of late, as global tensions and an uncertain economic climate have seen people invest in the precious metal.

 

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