Gold will go up forever becuase of government profligacy and mismanagement, right? No less an authority than VIETNAM holds a sanguine view toward the metal.
Miner gives gold bulls the green light
By Jack Farchy and Javier Blas in London and Ben Bland in Hanoi
Published: October 7 2010 15:03 | Last updated: October 7 2010 15:03
Gold prices hit a fresh all-time high as AngloGold Ashanti, the world’s third biggest gold miner, said on Thursday it had wound up its hedge book months ahead of its original plan, sending a bullish signal to the market.
Earlier on Thursday, the Vietnamese central bank said it would consider lifting an effective ban on gold imports that has been in place since May 2008 – another positive sign for prices, since Vietnam is traditionally one of Asia’s largest gold consumers.
AngloGold announced last month that it would raise nearly $1.4bn in new capital in order to close its hedge book by early 2011, joining Barrick Gold, the world’s top gold miner, in putting an end to the legacy of forward sales which pre-dates the boom in gold prices.
Traders said AngloGold had been active in the market buying back its hedges in recent days, even as prices rose to successive nominal highs. Indeed, they pointed to the miner's buying as one of the factors driving prices, which have risen 3.5 per cent this week.