The equity research firm which focuses on small and mid size resource companies, launched its September 2009 report covering 15 gold exploration and development companies.
What it showed is that gold has surged 10 per cent since early July to the US$1,000/oz level.
“In the last three months, the gold price has been driven by US dollar weakness” said RCR senior gold analyst Dr Tony Parry. “This hasn’t helped Australian or Canadian producers, whose currencies have appreciated, but nevertheless gold equities have performed well, and money is flowing into the sector.
“We expect to see gold trading between US$950/oz and US$1,000/oz for the rest of 2009 with some stability returning to the US dollar.”
Parry said inflation fears are probably premature, but may well push gold back above US$1,000 in mid 2010.
However, RCR does not subscribe to the US$1,500/oz or US$2,000/oz scenarios suggesting that demand fundamentals will “get in the way”.
“We see more risk on the downside towards US$900/oz if equity markets continue to rally. Inflation is not yet real enough to be a sustained driver of gold - this is expected in the second half 2010,” said Parry.
The report said the first quarter 2009 ‘crisis-driven’ demand for gold-backed Exchange Traded Funds (ETFs), almost evaporated in the following quarter, with an 88 per cent fall in funds inflow to ETFs.
Fortunately the slack was taken up by a rebound in jewellery demand (up 17 per cent second quarter 2009 vs first quarter 2009). Much less scrap gold coming on to the market (down 41 per cent in second quarter 2009 vs first quarter 2009) also supported the gold market fundamentals.
Gold share indices are typically 30-40 per cent above September 2008 levels, while the Morgan Stanley World Index is still six per cent below September 2008 levels.

The report is available at www.rcresearch.com.au

The Australian Gold Conference

12-13 October 2009 | Novotel Langley, Perth

 The Australian Gold Conference brings together an outstanding speaker panel to give you access to the latest thinking, the project updates, the investment strategies and time to spend networking with key players. The two-day conference will give you a clearer picture of what is happening now and strategies on how you can react.

What’s on the agenda?

• Economic outlook, currency forecasts – AUD vs USD
• Gold fundamentals and demand in the current climate
• Investment opportunities in the gold industry worldwide / investment considerations
• Chinese investment in the Australian resources community
• Fund manager perspective on gold investment as part of the portfolio mix
• Capital raising for the junior end of the gold industry – what are the secrets to success?
• Second hand gold trade – what are we seeing?
• Investing in Exchange Traded Commodities (ETCs) - outlook for these new investment vehicles
• The hedging debate
• Updates on production & exploration

For more information contact tel: +61 (0)2 9080 4307 or email: registration@informa.com.au

Visit: www.informa.com.au/conferences/mining/metals-minerals/the-australian-gold-conference