Gold Giant Newmont Says Metal Could Top $2,000 on Virus Stimulus
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16 April 2020, 5:37 pm ACST
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Top bullion miner’s CEO sees higher prices over long-term
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Gold could top $2,000 an ounce and will remain elevated over the next five years as the global economy contends with the impact of the coronavirus pandemic, according to the head of Newmont Corp., the world’s top miner of the precious metal.
“The level of stimulus globally that’s going into the economy certainly underpins higher gold prices for the longer term, and I don’t think that stimulus has stopped yet,” Chief Executive Officer Tom Palmer said Thursday in a phone interview from Perth. “You could certainly see scenarios that have it pushing north of $2,000.”
Spot bullion is trading around $1,720 -- close to a more than seven-year high -- and is forecast by numerous banks to extend gains as the impact of the virus pushes economies toward recession and prompts action from central banks. Those factors are adding to what was already a strong outlook, with rising demand among middle-class consumers in China and India and signs of supply constraints, Palmer said.
Read more: Gold Digs In Near Seven-Year High as IMF Warns, ETFs Swell Again
The metal is likely to trade in a range between $1,500 to $1,750 over the next two-to-five years “as the world adjusts to and accommodates the stimulus that’s coming,” he said. “You certainly might see that spike out of that from time to time.”
The scale of global monetary stimulus is a key factor that’s spurring investors to diversify into gold, Bloomberg Intelligence commodity strategist Mike McGlone wrote in a Wednesday note. “The foundation for higher prices has rarely been stronger,” he said.
