Bobby Godsell
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Gold market best in 30 years - Godsell
Allan Seccombe
Posted: Thu, 27 Jul 2006

[miningmx.com] -- THE gold market was at its strongest in at least 30 years owing to support from the jewellery sector and growing investment demand. As a result, the gold price was unlikely to weaken, said AngloGold Ashanti CEO Bobby Godsell.

AngloGold shies away from making price forecasts, but Godsell said the prospects for a higher gold price were good. “The market fundamentals are very strong. They are as strong as I’ve ever seen them in the 30 years I’ve had an association with this business,” he said.

“Therefore, we’d expect the price to trade where it is or trade up. That’s a modest prediction.”
as strong as I’ve ever seen them
“Central bank, scrap and new mine production, all of those seem quite modest in capacity and likelihood to go into the future,” he said.

Central banks sold up to 35 tons of gold in the second quarter of this year, bringing sales for this year to between 315 tons and 320 tons under the Washington Agreement governing central bank bullion sales, AngloGold Ashanti said in a statement accompanying their June quarter results.

This leaves scope for sales of another 180 tons before the end of 2006, if the quote under the Agreement is to be met, it said.

The gold price is currently trading at $632.50/oz. It reached a 26-year-high of $730 on 12 May only to fall to $565 a month later.
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The gold price has been extremely volatile in recent months charging up and down in large movements that were undreamt of a couple of years ago.

An estimated $90bn is invested in commodity funds and there are expectations in the market that there could be further inflows into that sector, AngloGold Ashanti said.

Mark Lynam, who is responsible for AngloGold Ashanti’s treasury functions, said good rains in India’s monsoon season boded well for crops and, by extension, jewellery demand in one of the world’s biggest gold markets. Gold jewellery demand had been under pressure lately.

In the June quarter, gold-back exchange traded funds added another 45 tons of the metal to its stocks, bringing the year-to-date growth to 149 tons, AngloGold said.