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Perth - World No 3 gold producer AngloGold Ashanti [JSE:ANG] CEO Mark Cutifani sees no bubble in gold prices and said prices could easily go higher amid global economic uncertainty.
Gold prices rocketed to a record high of $1 920 in September and have since eased to about $1 650 an ounce, still up about 25% on a year ago.
"I think the gold price probably reflects the fundamentals in the industry," Cutifani told reporters at the Commonwealth Business Forum in Perth.
"I don't see the price today as a bubble. I do think there is some upside on a $1 600 an ounce gold price on the basis that I think there is still a lot of financial uncertainty," he said.
Cutifani also said he expects a positive outcome from talks with the South African government around its resource tax regime.
The government has tried to reassure investors that it would not nationalise mines after calls by its youth wing that such a policy would improve the lives of the poor.
"The conversation isn't really in my view about nationalisation, it is about resource nationalism, it's about resource rents, it's about the role of business and how it connects to society," Cutifani said.
"I'd expect the ANC to take a political position by the end of next year," he said.
Cutifani said that although Australia's incoming carbon tax will have a serious impact on margins, it will not be enough to deter investment. But he said he is worried the country's proposed mining tax will be extended to gold.
"As I understand it, the way the legislation is being drafted, it leaves the door open to be extended to the other commodities so I'm concerned," Cutifani said.
Gold prices rocketed to a record high of $1 920 in September and have since eased to about $1 650 an ounce, still up about 25% on a year ago.
"I think the gold price probably reflects the fundamentals in the industry," Cutifani told reporters at the Commonwealth Business Forum in Perth.
"I don't see the price today as a bubble. I do think there is some upside on a $1 600 an ounce gold price on the basis that I think there is still a lot of financial uncertainty," he said.
Cutifani also said he expects a positive outcome from talks with the South African government around its resource tax regime.
The government has tried to reassure investors that it would not nationalise mines after calls by its youth wing that such a policy would improve the lives of the poor.
"The conversation isn't really in my view about nationalisation, it is about resource nationalism, it's about resource rents, it's about the role of business and how it connects to society," Cutifani said.
"I'd expect the ANC to take a political position by the end of next year," he said.
Cutifani said that although Australia's incoming carbon tax will have a serious impact on margins, it will not be enough to deter investment. But he said he is worried the country's proposed mining tax will be extended to gold.
"As I understand it, the way the legislation is being drafted, it leaves the door open to be extended to the other commodities so I'm concerned," Cutifani said.
