AngloGold Sees Gold at More Than $500 Oz Monday April 11, 2:34 am ET
PERTH, Australia (Reuters) - World No. 2 gold miner AngloGold Ashanti Ltd. said it expected gold to soon trade as high as $500 or more per ounce because of a weak U.S. dollar and high jewelry demand, topping a forecast by larger rival Newmont Mining Corp.
Gold, which currently trades for about $425 per ounce, last topped $500 in 1987.
"I believe there is every reason for the gold price to trade in a range of $400-$500 (per ounce) for the foreseeable future," AngloGold Chief Executive Bobby Godsell told the Australian Gold Forum meeting of miners and investment bankers.
"There is the possibility to trade at the top end of that range and even to move modestly outside that top end," Godsell said.
Last week Newmont President Pierre Lassonde predicted the gold price would likely stay in the $425-$475 per ounce range for most of 2005.
South Africa-based AngloGold, majority-owned by Anglo American, mined 6.05 million ounces of gold last year, making it second only to Newmont.
Demand for gold, traditionally regarded as the currency of last resort, was at its strongest in years thanks to a weakened dollar, which encourages gold buying by investors outside the United States, he said.
Even at today's price, gold is regarded as cheap by some when compared to other commodities -- it takes less than nine barrels of oil to buy one ounce of gold versus a long-term average of 17.5 barrels.
There was a risk, though, that gold could come under attack if rising U.S. interest rates further prop up the greenback, Martin Murenbeeld, chief economist at Vancouver-based Dundee Wealth Management Group, told the forum.
"The dollar can always experience a correction," Murenbeeld said.
The greenback's fall is partly owing to concerns in the foreign exchange market that the U.S. would not attract enough foreign investment to finance the widening U.S. trade deficit, which reached a record $617.7 billion last year.
Demand for gold jewelry was also running strong, Godsell noted.
Consumer demand for gold rose 7 percent last year, the first rise in four year, figures from the industry-financed World Gold Council show.
But the outlook for 2005 pointed to weaker growth, however, as times were harder and jewelry purchases less likely.
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