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Newmont expects gold price fall
PERTH, Australia (Reuters) -- Newmont Mining Corp, the world's largest gold producer, said it expects a further selloff in bullion markets this week following weekend advances by U.S.-led forces in Iraq. "There will be some pull back in gold," Newmont Chief Executive Wayne Murdy told Reuters ahead of a gathering of world gold producers at the Australian Gold Conference on Monday. "That will last for a period of time, but the underlying fundamentals of supply and demand within our industry, low interest rates and a weakening U.S. dollar... those aren't going to change," Murdy said. A rise in the gold price in the lead up to the war would mean a rise in earnings for Newmont this year, despite flat production. Gold last week lost almost four percent of its value, with the COMEX June futures price bottoming at $322.60, its lowest since December 4, 2002. The spot gold price Monday is $321.00. The build-up to war in Iraq tagged a premium on gold prices and increased volatility in bullion trading as investors sought so-called safe-harbour investments outside of stocks. Gold prices briefly raced to a six-and-a-half-year high of $390.50 an ounce in early February but retreated sharply after U.S.-led forces began the war on March 20. "There has been a premium, but that has deteriorated as the strength of the coalition forces has shown through," Murdy said. "I think we are going to see a lot of volatility in the market until that conflict is resolved." "We are still at a point where the gold price is below the average price of $350 all through the 1990s," Murdy said. "It's just starting to recover." Newmont expects to better last year's 42 cents net earnings per share, which were based on an average gold sale price of $313 an ounce, Murdy said. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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