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Evolution boss sees global uncertainty underpinning gold price
[MELBOURNE] Evolution Mining, Australia's no.2 gold miner, expects gold prices to remain strong due to geopolitical and fiscal uncertainty, despite a recent drop on prospects of a US rate hike in December.
"Until global economies can address the underlying systemic reality that we are all spending more than we can afford, it may be good for gold but not much else," Evolution's executive chairman, Jake Klein, said at an industry event.
Terror attacks, civil wars and political upheaval, including the potential election of Donald Trump as US president, all created uncertainty that was driving investor demand for gold, which was good for gold miners, Mr Klein said. "So if we are in a traditional bull cycle like the last seven - and I don't think there is any reason to believe we are not - there is still likely a long way to go for gold equities," he said.
Evolution has expanded over the past five years to become Australia's second-largest gold miner behind Newcrest Mining, acquiring mines or mine stakes from majors like Barrick Gold Corp and Glencore.
Its shares have jumped 75 per cent over the past year, but slid to a one-month low on Thursday following a drop in gold prices.
Gold prices hit a more than two-year high of US$1,375 an ounce in July and have since fallen to US$1,266.