Newmont chief Palmer calls a solid gold price despite wider stagflation fears

The head of the world’s largest gold producer – Tom Palmer of Newmont Gold Corp – thinks the gold price will hover around the US$1,800 per ounce mark in the coming months, whilst a higher floor forms under the market in the long term.

In an interview during this year’s PDAC Convention, the chief executive pointed to inflation plus economic and geopolitical uncertainties as factors supporting the gold price in a broader global financial environment haunted by fears of stagflation.

“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,” Palmer said.

While maintaining a conservative stance with regards to an upcoming price rally, he reasoned that the current floor in the gold price is around the $1,500-$1,600 mark, whereas previously it was about $1,200.

The gold price has fallen back on March 2022 highs above $2,000, but is little changed in the last 12 months and has performed better than many cryptocurrencies – a competing financial instrument for protecting value.

“I focus on gold being a store of wealth for millennia in a transparent and highly regulated market. Gold is a different investment decision than crypto,” Palmer said.

On Newmont’s prospects, the chief highlighted several projects in the company’s pipeline, including a $2.5 billon expansion in Peru. “Our radar is tuned on if opportunities were to present, but we’re very clear on the filters that would trip that radar,” he added.