Global Slowdown Benefits Gold Price
Australian gold mines are likely to benefit from an expected slowdown in the world economy and fall in commodity prices, Westpac Banking Corp general manager economics Bill Evans said at an Australian gold conference today
"For me that should be a big positive because if I'm right and the next big move in the global economy is down then maybe the gold industry won't suffer to the degree that the other commodities are going to suffer," Mr Evans said.
"We are going into a period where commodities are going to be turning down, but it doesn't necessarily follow that the gold price will turn down by anywhere near as much," Mr Evans said.
Mr Evans predicts the Australian dollar to drop to the US$0.60 range by the end of 2006, driven by a narrowing interest rate differential between the US and Australia, and a fall in commodity prices over the next couple of years associated with weakness in the world economy.
"For me that should be a big positive because if I'm right and the next big move in the global economy is down then maybe the gold industry won't suffer to the degree that the other commodities are going to suffer," Mr Evans said.
"We are going into a period where commodities are going to be turning down, but it doesn't necessarily follow that the gold price will turn down by anywhere near as much," Mr Evans said.
Mr Evans predicts the Australian dollar to drop to the US$0.60 range by the end of 2006, driven by a narrowing interest rate differential between the US and Australia, and a fall in commodity prices over the next couple of years associated with weakness in the world economy.
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