The price of gold may have bottomed and will probably trade between $US1300 and $US1400 an ounce for the rest of the year, says Michael Leu, chief executive of Sovereign Gold.
At 1044 AEST spot gold was at $US1334.22 – that’s up 11 per cent from June 27 when bullion fell to $US1200.65. Leu says there is little chance gold will fall its June 27 prices anytime during the rest of the year.
Gold “will increase in value”, he told Markets Spectator. “The rally in the US dollar is failing. You can’t print trillions of dollars and not have an inflationary effect. Capital will look for security in gold. There is going to be a ‘V’ bottom in the market.”
At 1044 AEST Sovereign Gold was up 0.5 cents, or 2.2 per cent, to 23 cents. Other gold miners have also gained: Australia’s biggest gold miner Newcrest added 74 cents, or 6.2 per cent, to $12.69; Alacer Gold increased 25 cents, or 10 per cent, to $2.64; while Medusa Mining gained 16 cents, or 7.3 per cent, to $2.36.
Sovereign Gold, backed by Hudson Resources, Raffles Capital and Chinese state-owned enterprise Sugec, has an inferred resource estimate of 239,000 ounces of gold at its Mount Adrah site, west of Canberra. Leu says the company has $21 million in funding for 11 exploration licenses. Its gold exploring technique is based on discovering new low grade, large tonnage deposits.
“Capital will start flowing back into resources,” says Leu.