Gold's floor price moving higher, Newmont CEO Palmer says

mound of gold

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Newmont (NYSE:NEM) CEO Tom Palmer is not predicting a gold price rally, but does see a higher floor forming under the market, with prices poised to stay around current levels of ~$1,800/oz and possibly a bit higher, Bloomberg reported Wednesday.

Palmer is willing to forecast more support when prices dip, a floor closer to $1,500-$1,600/oz compared with a previous floor of ~$1,200, according to Bloomberg.

“I see no reason why you wouldn’t, over the next year or two, see it around current levels, but more importantly sitting on top of a floor that has fundamentally moved given the events of the last couple of years,” Palmer reportedly said at the Prospectors & Developers Association of Canada gathering in Toronto.

Palmer also said the gold mining industry will need more mergers and partnerships to dig up harder-to-access deposits in an environmentally friendly way.

“We are seeing lower grades and more-difficult-to-reach ounces,” according to Palmer, and the ability to tap those ounces while assuring the industry addresses “critical sustainability issues” will require access to capital and agility.

Newmont’s (NEM) “total return potential remains significant,” Individual Trader writes in a bullish analysis posted recently on Seeking Alpha.

Roy Walsh

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