Gold only has one way to go, and that’s in a “north easterly” direction, former Rio Tinto executive Owen Hegarty says.
Speaking at the Gold Symposium forum in Sydney this week, Hegarty said demand from China is “unstoppable” and Australia will be playing “catch up” to deal with a “supply problem” for years to come.
Hegarty explained physical gold supply hasn’t been able to keep up with “sensational demand” which is “led by China and followed by India”.
China’s growing middle class and urbanisation will see growth continue for several decades to come, Hegarty said.
“They’re going to maintain growth at between seven and eight per cent for the whole of the life of this leadership,” he said.
Hegarty said as big miners continue to shelve and talk down new projects the gap between supply and demand will only be accentuated.
“Supply is going to continue to be the issue, we are going to be playing catch up football on the supply side,” Hegarty said.
“We need continue to work hard at reducing regulatory constraints.”
Currently the executive vice chairman at G-Resources Group, Hegarty is bullish when it comes to the gold price.
Recognising the gold price has been volatile, he said there is only one way it will go and that is a “north easterly direction over time”.
Article published courtesy of Australian Mining. For more daily news and comment on Australia’s mining sector click here.