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Gold fever is back, a sign of investors’ growing – but perhaps misplaced – anxiety about what lies ahead for the global economy. The World Gold Council, the marketing arm of the gold industry, announced on Thursday that demand for the precious metal hit its second-highest level on record during the first quarter of the year.
Meanwhile, Bank of Montreal analysts boosted their forecast for gold. They say they now expect the metal to begin next year at around $1,400 (U.S.) an ounce. That is well above its current level of roughly $1,270 and far ahead of the bank’s previous forecast of $1,200.
In another indication of the growing optimism around bullion, Goldcorp Inc. said on Thursday that it was acquiring Kaminak Gold Corp. for $520-million (Canadian) in stock. Kaminak’s key asset is the Coffee gold project about 130 kilometres south of Dawson, Yukon.
The acquisition, done at a 40-per-cent premium to Kaminak’s recent share price, suggests that major gold producers may once again be ready to focus on expansion projects after several years of asset sales and heavy writedowns.
Precious metals stocks have rocketed higher since the start of the year as the price of gold has climbed from lows near $1,050 (U.S.) that it hit last December.
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