CANBERRA: Gold has retained its status as a safe-haven investment, despite the rising strength of the US dollar and turmoil elsewhere in commodity markets.
The price has remained stable in 2014 and what’s more, experts believe that the long-term outlook for the precious metal is well supported over the coming year. The price of gold ended 2014 almost unchanged on 12 months ago, closing on Wednesday at around $US1,184 an ounce after starting the year at $US1,205. Fears of a crash in the price were overblown.Goldman Sachs has now set its long-term forecast for the price of the yellow metal at $US1,200 an ounce for the next three years.
The investment bank estimates that this is the break-even price for the majority of gold miners once all costs such as exploration, management and mine repairs are included.As such, the price of gold may well fall below $US1,200 in the year ahead, but lower prices would force loss-making miners out of business and reduce supply, helping prices to recover eventually.
Mark Bristow, chief executive of FTSE 100 miner Randgold Resources, has said: “The [gold-mining] industry is clearly stuffed at $US1,140 and it will be a bloodbath at $US1,000.”Hunter Hillcoat, from broker Investec’s natural resources team, has set a price forecast of $US1,150 an ounce for next year.
