Resource Capital Research Bullish on Gold in the Near Term
Source: Mineweb.com (2/26/08)
A study released this month by Sydney-based Resource Capital Research (RCR) said the perception of gold being a safe haven should be especially beneficial to Australian producers with the gold price rising 27% in Australian monetary terms to the $A1,000 range
RCR said gold market fundamentals should remain strong through 2010, reflecting flat to declining global mine production, declining Central Bank net supply and increased physical demand from China...
RCR's principal, John Wilson said the outlook for the gold price is positive, driven by volatile equity markets, declining United States economic fundamentals, re-inflationary Central Bank policies and deteriorating outlook for reserve currencies.
"Gold as a safe haven asset class is widely expected to drive the gold price through $US1,000/oz over the next six to 12 months. Indeed, with the producer cash cost curve steepening exponentially at $US650/oz, there is potential for further strong price rises in coming years."
He said that at the junior end of the Australian market, given equity market turmoil, RCR currently favours companies with a solid cash position, near-term exploration "news flow" and project development milestones. In the producers. RCR favours companies with rising production profile from projects where cost pressures are contained.