re: bit of bad luck.....
NEM still confident of rising gold price, and Pierre so far has been spot on. they have even bought back all their hedges for 2007 - no there is confidence for you!
article
DENVER, Sept 27 (Reuters) - Not surprisingly, gold mining companies are bullish on the price of gold.
Just take the world's second-biggest producer, Newmont Mining (NEM.N: Quote, Profile, Research). On the day the company's stock fell nearly 2 percent after announcing lower gold sales estimates, its top two executives were talking up the precious metal.
"It's the 1970s story all over again," said Newmont President Pierre Lassonde, referring to gold's meteoric rise three decades ago when oil embargoes, inflation and other economic malaise sent the price of gold over $800 per ounce.
"Just take that song sheet, it's the same one, different words, that's all," he told the Denver Gold Forum.
Chief Executive Officer Wayne Murdy, who was also attending the gold industry conference, told Reuters in an interview simply: "I am bullish on gold."
He would not be drawn on a prediction but agreed with economist Martin Murenbeeld, who on Tuesday forecast gold prices could rise above $700 an ounce next year due to strong demand for commodities and political tensions.
Despite a recent blip in the gold price, which saw it slip to $580 per ounce after hitting a quarter-century high of $730 in May, it has rallied in recent weeks and went through the $600 barrier again on Wednesday.
In his address, Lassonde laid out his argument for a higher gold price thus: Continued...
"The current account deficit of this country is going to reach a trillion dollars very shortly. The U.S. dollar has nowhere to go but down. There's no choice.
"It could stay here for another year or two and might even go up, but ultimately it will continue to go down."
In addition, central bank reserves in Asia, "are excessive, they are way over. That wall of money is just flowing back onto the world and that's what, at the end of the day, is going to get the gold price to go up," he said.
But Lassonde noted that even though in the 1970s gold went from $35 to $800, "there was one big hiccup in 1975-76 when it went down by 50 percent.
"At some point China is going to have a hiccup and we are going to have a hiccup as well. I don't know if it's going to be this year or in 2008 after the Beijing Olympics.
"(But) It's like an earthquake in Los Angeles, you don't know when it's going to be. But in the meantime, you are likely to see much higher gold prices," he said, without predicting how high.
Lassonde said Newmont has just bought back all its hedges due for 2007 "and that's just to show you we have pretty good confidence in the gold price going forward. We do believe we are in a long-term gold bull market."
He noted that in the 1970s, the gold price went up faster than commodity prices, "But this time the gold price is only up about 132 percent, (while) copper is up 438 percent, along with steel and all the other commodities, and oil.
"But in the next phase of the bull market, gold is going to be the real winner. I don't think you're going to see the copper price go from $4 to $8 or zinc prices go up by 200 percent again."
Lassonde said Newmont expects to increase its reserves for the fifth straight year, noting, "We are generating growth even though our costs have gone up, but the gold price is going up even faster."
Earlier, Denver-based Newmont lowered its forecast for gold sales this year and next partly due to loss of business in Uzbekistan and lower output in Ghana and Peru.
Lassonde said the news "is just like Halloween. We got all skeletons out of the closet, they're all out there to see and from there on any surprise will be on the upside."
NEM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
