Nevermind record high gold prices, watch where it settles - Barrick Gold
Asked how high gold can go, Barrick Gold (NYSE:GOLD, TSX:GOLD.TO) CEO Mark Bristow deferred and rather focused on gold's aftermath.
Bristow was interviewed by Bloomberg, and his video was published on Monday.
Bristow said he is less concerned with where gold is going as opposed to where it settles.
"If you look back to 1972 there have been two gold spikes: 1980 and 2011. And of course we are busy with one right now," said Bristow. "But what is imporant: if you look post each big gold price hike there is a new base that is formed. What happens when gold prices run-up like this is that the paper money is at risk. And on top of that, you get a flight to safety."
Bristow said gold and the flight to safety will ease as the global economy stabilizes.
"You don't have to be a rocket scientist to realize all this money printing is going to cause damage to core global currencies."
Bristow believes there will be a new base for gold but warns there will be lots of volatility getting there.
"This is an unprecedented global event. At the end of the day there will be a new base, and we will wait to see what that base is."
Bristow said Barrick is built to operate for the next 10 years at $1,200 gold.
"Sticking with $1,200 as the price for gold is the right thing to do. For us to change the gold price in which we allocate capital, we would take away from our margins."
Bristow said there are some changes that can be made at the margins that will allow Barrick Gold to take advantage. But he said there will be no core changes until gold finds its new base.
Barrick Gold announced its Q2 today. <a href="https://www.kitco.com/news/2020-08-10/Barrick-Gold-reports-14-rise-in-dividend-amid-soaring-gold-prices-on-track-to-achieve-2020-production-guidance.html">Barrick is currently on track to achieve its annual production guidance despite the COVID-19 impact</a>.
Q2 numbers showed year-to-date gold production of 2.4 million ounces, which is right around the mid-point of its 4.6 million to 5 million ounce 2020 guidance, the company said in a press release.