Mining labor disputes in South Africa "are only going to add to the risk and the pressure that we're going to see higher costs again after some very big cost rises in 2012," ANZ Research strategist Nick Trevethan tells CNBC in a Feb. 19 interview.
"Exploration is expensive, particularly in the gold mining area, and exploration has not been that successful. ... Gold really has been a little bit surprising. We had expected to see it push a little bit higher by now. I think what we're seeing are investors particularly in the West rotating out of gold, but those cost pressures that we talked about I think are going to support prices, and support prices at a lot higher levels than many people are talking about right now. I think there is a risk right now that gold could retrace to around the $1,540 level on a technical basis, but we've actually put out a buy recommendation today on gold below $1,610. We believe that the FOMC has been interpreted as perhaps being ... overly hawkish, and we may actually see a more dovish FOMC when we get the meeting minutes out in the middle of the week, and that would actually be quite positive for gold, I think. ... The more money Japan is pumping into the system the more positive that is likely to be for gold. ... For the end of the year we're still looking at around the $1,890 level, which is toward the bullish end of the spectrum. We're not in the $2,500-$3,000 camps, but $1,890's quite a long way to go from where we are now. But I do think if we see this more dovish FOMC and we see the return of buyers in India and in China, in addition to additional liquidity coming out of Japan, I think $1,890's very possible."
"Exploration is expensive, particularly in the gold mining area, and exploration has not been that successful. ... Gold really has been a little bit surprising. We had expected to see it push a little bit higher by now. I think what we're seeing are investors particularly in the West rotating out of gold, but those cost pressures that we talked about I think are going to support prices, and support prices at a lot higher levels than many people are talking about right now. I think there is a risk right now that gold could retrace to around the $1,540 level on a technical basis, but we've actually put out a buy recommendation today on gold below $1,610. We believe that the FOMC has been interpreted as perhaps being ... overly hawkish, and we may actually see a more dovish FOMC when we get the meeting minutes out in the middle of the week, and that would actually be quite positive for gold, I think. ... The more money Japan is pumping into the system the more positive that is likely to be for gold. ... For the end of the year we're still looking at around the $1,890 level, which is toward the bullish end of the spectrum. We're not in the $2,500-$3,000 camps, but $1,890's quite a long way to go from where we are now. But I do think if we see this more dovish FOMC and we see the return of buyers in India and in China, in addition to additional liquidity coming out of Japan, I think $1,890's very possible."
More information can be found online at http://www.goldbullionadvisors.com
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