Gold prices to climb in 2012: mining companies

About 80 per cent of global mining companies expect the price of gold to move higher next year and a clear majority sees bullion hitting a new record of $2,000 U.S. per ounce, says consultant PwC in its latest Annual Gold Price Report.

About 62 per cent of respondents said bullion positively affected their stock price – but less than expected.

As of Dec. 15, gold bullion had risen this year by 11 per cent, but gold stocks within the S&P/TSX Global Gold Index have declined by 10.6 per cent.

“The main driver behind this disparity is the availability of alternative investments that investors can use to generate a return from higher gold prices,” said PwC’s John Gravelle. “Such investments don’t give the investor such risks as project cost overruns and resource nationalism.”

But the disparity has influenced ways in which companies use their higher cash flows, he added: 27 per cent paid dividends in 2011, up from nine per cent last tear, and 29 per cent expect to spend cash on acquisitions.

The report assesses gold mining companies globally, with the companies surveyed representing 26.5 million ounces of gold mined in 2011 compared with 37.75 million ounces to be mined in 2012.

“Fat-cat acquisition companies are in the driver’s seat, ready to take over smaller companies that aren’t certain when the current market malaise will llift,” Gravelle said. Juniors may want to accept takeovers given their challenges in raising capital.”

Tags: Gold analysis, gold forecast, Gold future prices, Gold futures, Gold investment, Gold news, Gold price, gold price 2012, gold price forecast, Gold prices, price of gold, Spot gold, Spot gold price

Posted by admin on Dec 21 2011. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry