I WILL HOLD MYG UNTIL PRODUCTION. Gold may hit $US2,200/oz:...

I WILL HOLD MYG UNTIL PRODUCTION.




Gold may hit $US2,200/oz: AngloGold

Topics:Commodities Market

On Tuesday 25 October 2011,

The gold price could rise to $US2,200 an ounce by 2013 as global economic uncertainty continues, South Africa-based gold mining giant AngloGold Ashanti says,

AngloGold Ashanti chief executive Mark Cutifani said there was a big upside to the current gold price of about $US1,600 an ounce.

He said the recent run up in the gold price was not a bubble and the current price barely covered production costs for many miners.

"For me, the risk is still to the upside," Mr Cutifani told the Commonwealth Business Forum in Perth on Tuesday ahead of the CHOGM forum later this week.

"Within the next two years, I think it could easily touch $US2,200 an ounce on the basis that input inflation is still significant and ... the world will see a lot of uncertainty over the next couple of years," he said.

"In those cases, gold tends to do fairly well."

Mr Cutifani said gold mining companies were struggling with skyrocketing production costs, which were set to continue rising.

"It costs almost $US1,200 now to produce an ounce of gold when you take capital and all costs into account," he said.

"At about $US1,600 an ounce, the bulk of the industry is still struggling to recover its weighted average cost of capital, so I don't see the price today as a bubble."