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Follow on Google News |  Gold Executives: Bullish On Gold Price, Financial Uncertainty Driving Gold Price HigherUnderpinning higher gold prices has been central bank buying, a reversal in the last two decades in which nations had been net sellers of gold, based on the report. Read on...
By: James Bakerman “Gold as a metal is not actually used for that many things. Gold is primarily purchased for jewelry or used as a store of wealth. I think that is why they’re bullish on gold, with the uncertainties that exist on the planet on the economic side and uncertainty over what’s going to happen in Europe,” Cinnamond stated. “If you look at gold price levels ... they’ve been at the $1,600, $1,700 mark for a while now, so I believe the greater prices bears that out. If you went back towards the late ‘90s, I think gold was closer to the $300 mark. It has been up to six occasions that.” Underpinning higher gold prices has been central bank buying, a reversal in the last two decades in which nations had been net sellers of gold, based on the report. Gold is currently trading at about $1,650 US an ounce, down from much more than $1,700 at the beginning of December. Coupled with high prices over the previous a number of years, there has been a shift in focus by gold executives to watch their companies’ cost of production, Cinnamond said. “It’s not growth at all costs anymore; they’re becoming more careful about what they’re acquiring,” Cinnamond said. “Some of the bigger gold businesses have pulled back in creating some of their very costly projects and refocused on maximizing and optimizing the existing projects they have.” How high will Gold and Silver go? Learn more >> http://www.gold- B.C. does not have any major primary gold mines, but the province does have copper-gold mines that will benefit from a high price for gold, Cinnamond stated. An evaluation integrated within the report of the 46 largest TSX-listed gold mining companies shows that much more than 20 of those businesses have cash reserves higher than $500 million. Cinnamond said those cash reserves, coupled using the shortage of available money for smaller sized junior gold companies, will mean the senior mining companies will be searching for juniors to purchase out. “A large amount of (B.C. juniors) are the smaller sized companies which are struggling for cash, so they are much more likely to be targets, that is great, as long as their project is sufficiently large or capable of being developed within the close to sufficient term that a bigger company is interested,” “If you’re a smaller sized company and also you haven’t got a project that a larger business is interested in, it’s likely you are going to run out of money very soon. That is the problem that the smaller sized companies in B.C. are facing.” As smaller sized companies are having difficulty raising cash, they're seeking to much less conventional indicates of financing, Cinnamond added. Metal streaming - where a company offers to buy a percentage of future output - is one of these means, and B.C. has two precious metals streaming businesses: Silver Wheaton and Sandstorm Gold. “It’s a fairly new phenomenon in the mining globe, but you will find more and more companies doing this simply because they are not able to access the conventional sources of funding like equity or debt,” Cinnamond stated. “From the streaming companies’ point of view, it is a perfect storm because the commodity prices are so high and companies find it challenging to find other sources of funding. They’ve got all kinds of projects becoming presented to them and they can take their choose. The streaming companies are performing very well consequently.” The PwC report also discovered that Canada had probably the most gold transaction activity in 2012, and that 4 of the top offers saw gold juniors acquired by Chinese buyers. How high will silver go? Learn more >> http://gold- End
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