Gold Price to Hit $US1500

Submitted by Jim Thesiger on 12 October, 2009 - 06:20

Lihir Gold (LGL), one of the major gold exploration and mining companies of Australia which has operations in New Ireland, Papua New Guinea have stated that the price of gold could increase to $US1500 per ounce. The comments came from the mining giant after the price of gold moved to $US1062.70 in the New York Mercantile Exchange a week earlier. The weak US currency was considered as one of the main reasons for the rise of gold price along with the Chinese restocking.

Arthur Hood, the chief executive of Lihir Gold stated that he was expecting to see the gold price to keep increasing. The price of gold had doubled over the last five years and the forecasts regarding the gold price hitting the $US1500 per ounce is pretty much obtainable he added. Mr. Hood mentioned that the supply of gold is gradually declining while the demand is moving upward. He referred to the central bank purchasing as a stimulator that boosted the demand for gold. The Lihir Chief Executive also stated that with an increase in the Chinese reserve, its proportion of gold remains unchanged and its own right will boost up the demand from the central banks. Several central banks have declared that they are raising the percentage of gold reserves while the rate at which central banks of Europe have been selling gold has fallen. Mr. Hood said that Lihir Gold would concentrate on the organic growth and right now is not concerned about the acquisitions.

Lihir’s stocks fell by 4c to $3.13 on Friday. The second largest gold miner of Australia that considers the West African region as one of the highly potential spots for the exploration of new gold mines was stretching its operation to Ivory Coast. The company has added around a million ounces of resources in its Bonikro operation.