Despite Slowdown in Physical Demand Gold Projected to See 12th Consecutive Bull Year
NEW YORK, NY -- (Marketwire) -- 08/20/12 -- Gold prices have rebounded to above $1,600 an ounce, from as low as $1,540 in May, on hopes of further monetary easing from both the Federal Reserve and the European Central Bank. "When we look forward into the second half of this year, there are a great many unanswered questions that could potentially be positive for the gold market in terms of the future of the euro zone and also I think in North America," said Marcus Grubb, managing director at the World Gold Council (WGC). Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Jaguar Mining Inc. (NYSE: JAG) (TSX: JAG) and Rubicon Corp. (NYSE: RBY) (TSX: RMX).
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A recent report from the World Gold Council showed that global demand for gold fell 7 percent in the second quarter. Demand in China, the world's largest buyer, fell 7 percent from the year ago quarter. The drop was the first year-over-year decrease in nearly a decade. India saw the steepest drop, as demand fell 38 percent in the second quarter. For the year India's total demand for goal is expected to be in the range of 688 and 700 metric tons, a drop of between 28%-33% from the year prior. Despite the drop in demand the WGC still expects 2012 to be a bull year for gold.
"If you look at the price behavior this year, our view is that it's likely we will see a 12th straight year of the bull market," said Mr. Grubb.
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Based on its development plans, Jaguar is one of the fastest growing gold producers in Brazil. The company is actively exploring and developing additional mineral resources at its approximate 256,300-hectare land base in Brazil. The company expects 2012 gold production in the range of 110,000 to 120,000 ounces.
Rubicon Minerals is an exploration and development company, focused on developing its flagship Phoenix Gold Project in Red Lake, Ontario. Rubicon controls over 100 square miles of prime exploration ground in the prolific Red Lake gold district which hosts Goldcorp's high-grade, world class Red Lake Mine.
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