DRDGold CEO, Niel Pretorius, believes gold prices will remain elevated and supported by global demand fundamentals, though the company was basing its plans for future profitability on a lower bullion price as it ramps up production, contains costs, and explores acquisitions.
Gold prices steadied around 2 510 R44 524 per ounce yesterday, holding close to record levels thanks to the boost to rate cut sentiments by US Federal Reserve chairman, Jerome Powell. The higher gold price has helped South African gold miners such as DRDGold avoid drastic earnings plunges after production for the year to June missed targets.
Pretorius told Business Report in an interview that demand fundamentals for bullion remained high, likely providing support for gold prices for longer. Moreover, Asian gold buying and private sector investments into gold remain elevated.
There are many different dynamics at play. The gold price used to reduce quite substantially before, but recently we have seen Western economies no-longer being the only determining factor in the gold price, and we are seeing a lot of central bank-buying and private sector investment from the East, said Pretorius.
He admitted that the company would have benefited more from the high gold price if it had attained its production targets for the year to June. Nonetheless, the company is investing into its operations over the next two years to boost gold output to 6 tonnes by 2028.
