Analysis of the third kind
18 April 2014 18:03 (South Africa)
Business

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

  • Branko Brkic
  • 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
  • Business


Comments
Our policy dictates first names and surnames must be used to comment on articles. Failure to do so will see them removed. We also reserve the right to delete comments deemed lewd, racist or just generally not contributing to intelligent debate that have been flagged by other readers. As a general rule of thumb, just avoid being a douchebag and you'll be ok, both on these pages and in life. Read the full policy here

blog comments powered by Disqus