(Kitco News) - Tom Palmer, the CEO of the world's largest gold miner Newmont, says the events of the last few years mean the floor for gold prices has lifted. There is also the fact that inflation means it could be more costly to get the yellow metal out of the ground.
Where they may have once fallen to US$1200/oz, Palmer thinks they will remain above US$1500-1600/oz, prices at which the major producers with the scale to keep costs low should be making bank despite rising supply chain and labor costs.
"I see no reason why you wouldn't, over the next year or two, see it around current levels, but more importantly sitting on top of a floor that has fundamentally moved given the events of the last couple of years," he said after delivering a keynote speech at the PDAC Convention in Toronto.
He added that small gold miners are struggling with rising supply chain and labor costs, consolidation in the sector makes sense.
Gold has been consolidating since late 2020 and there seems to be a consolidation low of $1678.1/oz and a high of $2075.14/oz. It appears that anything higher than $1500/oz pleases the Newmont CEO. The old 2011-12 consolidation now seems like a sticky zone and looks like it's providing some real support.
