Gold producers see potential for immediate gains should Greece exit the euro having voted against additional austerity measures.
The S&P/ASX All Ordinaries Gold Index, which tracks miners in Australia, the world’s second-biggest producer, climbed 2.6 percent at 1:14 p.m. in Sydney.
Miners are poised to advance along with haven assets if Greece leaves the common currency, said Raleigh Finlayson, managing director of Saracen Mineral Holdings Ltd., an Australian producer of the precious metal.
“We may be in for the perfect storm if we get more turmoil from Greece with them being kicked out of the euro,” Finlayson said by phone from Perth, where the company is based. Saracen will this week expand its gold operations as mining resumes at the reopened Thunderbox mine in Western Australia.
A combination of a higher U.S. dollar gold price and a weak Australian dollar would provide a particular boost to suppliers in Australia, Finlayson said. “You could see gold prices well north of A$1,600 ($1,197) and in a flash,” Finlayson said.
“That’s what we are all waiting to see over the next week or so.”
Saracen advanced 2.3 percent to 45 Australian cents at 1:12 p.m. in Sydney, as fellow producers St Barbara Ltd. jumped 4 percent and Evolution Mining Ltd. rose 5.9 percent. Zijin Mining Group Co. fell 7.2 percent in Hong Kong.
Significant Catalyst
“A few years back, if a whole modern country was about to go bankrupt, you’d see a stronger reaction in gold,” St Barbara Chief Executive Officer Bob Vassie said by phone, observing that a Greek exit from the euro would offer a more significant catalyst for gold prices.
“The fact that we are now going into potentially uncharted territory means that sort of uncertainty could kick on gold.”
Bullion for immediate delivery climbed as much as 0.6 percent to $1,175.45 an ounce and was at $1,167.95 at 11:15 a.m. in Singapore, according to Bloomberg generic pricing. The price of gold in Australian dollars rose 0.5 percent to A$1,560.90.
“An Australian dollar at 75 U.S. cents certainly provides a tailwind” for gold miners, said James Wilson, a Perth-based analyst at Morgans Ltd. The Australian dollar earlier dropped below 75 U.S. cents to a six-year low and traded at 74.83 U.S. cents at 1:17 p.m. in Sydney.
bloomberg.com
The S&P/ASX All Ordinaries Gold Index, which tracks miners in Australia, the world’s second-biggest producer, climbed 2.6 percent at 1:14 p.m. in Sydney.
Miners are poised to advance along with haven assets if Greece leaves the common currency, said Raleigh Finlayson, managing director of Saracen Mineral Holdings Ltd., an Australian producer of the precious metal.
“We may be in for the perfect storm if we get more turmoil from Greece with them being kicked out of the euro,” Finlayson said by phone from Perth, where the company is based. Saracen will this week expand its gold operations as mining resumes at the reopened Thunderbox mine in Western Australia.
A combination of a higher U.S. dollar gold price and a weak Australian dollar would provide a particular boost to suppliers in Australia, Finlayson said. “You could see gold prices well north of A$1,600 ($1,197) and in a flash,” Finlayson said.
“That’s what we are all waiting to see over the next week or so.”
Saracen advanced 2.3 percent to 45 Australian cents at 1:12 p.m. in Sydney, as fellow producers St Barbara Ltd. jumped 4 percent and Evolution Mining Ltd. rose 5.9 percent. Zijin Mining Group Co. fell 7.2 percent in Hong Kong.
Significant Catalyst
“A few years back, if a whole modern country was about to go bankrupt, you’d see a stronger reaction in gold,” St Barbara Chief Executive Officer Bob Vassie said by phone, observing that a Greek exit from the euro would offer a more significant catalyst for gold prices.
“The fact that we are now going into potentially uncharted territory means that sort of uncertainty could kick on gold.”
Bullion for immediate delivery climbed as much as 0.6 percent to $1,175.45 an ounce and was at $1,167.95 at 11:15 a.m. in Singapore, according to Bloomberg generic pricing. The price of gold in Australian dollars rose 0.5 percent to A$1,560.90.
“An Australian dollar at 75 U.S. cents certainly provides a tailwind” for gold miners, said James Wilson, a Perth-based analyst at Morgans Ltd. The Australian dollar earlier dropped below 75 U.S. cents to a six-year low and traded at 74.83 U.S. cents at 1:17 p.m. in Sydney.
bloomberg.com
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