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31 May 2016 09:36 (South Africa)
Business

Gold could hit $1,600 if oil soars - Gold Fields CEO

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Business
gold bar

The price of gold could hit $1,600 an ounce if crude oil goes to $100 a barrel in the next six to 18 months, the chief executive of South Africa's Gold Fields (GFIJ.J), the world's No. 4 gold producer, said on Wednesday at the Denver gold conference.

"Some people say oil is going up to $100 a barrel in the next six to 18 months. If that's true, and if you look at the long-term relationship between gold and oil, you should find that gold would go to $1,500 to $1,600," Nick Holland told Reuters in an interview during the Denver Gold Forum.    

"The bias is more to the upside than the downside at this stage."

Gold (XAU=) hit an 18-month high on Wednesday, rising above $1,020 an ounce as the dollar's slide to 2009 lows against the euro sparked buying of the metal as a hedge against currency risks.

Oil was trading at just below $72 a barrel. Gold is often used as a hedge against inflation, and because of that, oil and gold have typically moved in the same direction.

Asked what gold north of the $1,000 level meant for gold producers, Holland said "It just means that we make more money."

  • Branko Brkic
    branko3048 a ray
    Branko Brkic

    Brkic is the founder and editor of The Daily Maverick.

    He has edited magazines on business and politics, technology, and wildlife. He has also published fiction and non-fiction books, most of them in Serbian. Though he has never pretended to be a reporter, his wide knowledge of politics (especially in America), combined with his experiences in a disintegrating Yugoslavia, gives him an unusual outlook on events in South Africa.

    Despite the vowel-poor surname, he tells anyone who asks that he hails from Hyde Park, Johannesburg, having spent most of his adult life in South Africa.

    Recent columns:

  • Business

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