Gold prices 'to take another stab at $1,000' - Wednesday 21st May 2008

A spokesperson from one of the world's biggest mining corporations has predicted that gold prices could reach $1,000 an ounce again due to a lack of new discoveries of the precious metal.

Alexander Davidson, head of exploration and corporate development at Barrick Gold, told Reuters that he is bullish on future long-term gold prices, with a steady $1,000 an ounce price a distinct possibility.

He said that the costs involved in the gold mining process are causing the global output to fall, although demand is as robust as ever.

"The industry cost structure is such that to find a mine, build a mine, or acquire a mine and then operate a mine the break-even cost for the industry now is probably in the $700 to $800 range," he said.

Earlier this week, David Galland, writing for Resource Investor, said that he believes the era for gold discoveries has now peaked, with new mines only yielding a fraction of previous outputs.

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Goldbug, 21 May '08

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