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Gold owners dismiss price distress Posted: Tue, 13 Jun 2006 [miningmx.com] -- SOUTH African gold company owners remained bullish in the face of a $35/oz decline in the gold price on Tuesday saying that the correction wasn't yet heavy enough to reverse the bull market. Gold futures fell $35/oz while the dollar continued to strengthen against the yen on expectations US interest rates are headed higher, sapping demand for the precious metal, reported MarketWatch. However, Marc Watchorn CEO of Wits Gold, a gold exploration company listed in Johannesburg, said the US economy remained in distress as evidenced by the massive increase in money supply in the last five years. "We tend to worry about the day-to-day price, but the evidence shows that the US has increased money supply about 54% to $10 trillion in the last five years," Watchorn said. However, Watchorn sounded a note of caution. "If the gold price drops below $550/oz, the bull trend would be reversed. That's my personal view," he said. Mark Wellesley-Wood, CEO of DRDGOLD, one of South Africa's marginal producers, said that Tuesday's severe correction did not reverse the general up-trend in the gold market. "I looked at some charts earlier today and on December 21 saw that the gold price was $490/oz. That means I'm still $100/oz ahead of where I was six months ago," Wellesley-Wood said. There was also stubborn optimism about the fortunes of South African based gold producers which were protected from dollar price weakness by the weakening of the rand against the dollar. "The gold price is $20/oz down in dollar terms, but only $10/oz down in rand terms. This is one of those situations when it's better to be a South African gold producer," Wellesley-Wood said.Free news alerts: click here to
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