Top US. Gold Producer Sees Prices Increasing 25 Percent by 2020
New York (Apr 24) AprNewmont Mining Corp., the largest U.S. gold producer, expects the price of gold to increase about 25 percent by 2020 on rising demand from China and a weaker dollar.
While Newmont foresees some fluctuations in the short term, it has budgeted for a $1,200-an-ounce gold price through 2017, Chief Executive Officer Gary Goldberg said. The Greenwood Village, Colorado company expects gold to rise to $1,500 an ounce by the end of the decade.
“We will see growth in demand from China, where a middle class of 300 million will grow to over 500 million by 2020,” Goldberg said by phone on Friday. “China’s middle class likes to own gold for jeweler and investment purposes.”
China, the largest gold consumer, may also exercise more influence over the market after the Sept. 18 opening of trading on the Shanghai gold exchange, according to an April 6 Bloomberg Intelligence note.
Gold fell 1.3 percent to $1,178.37 an ounce at 8:10 p.m. in London. The metal is down 39 percent from its Sept. 6, 2011 record high of $1,921.17.
Goldberg said that the strong U.S. dollar is “definitely having an adverse effect” on gold prices. He expects that the dollar will “eventually come back off of its highs in the next couple of years.”