{"id":1560,"date":"2022-06-27T04:51:35","date_gmt":"2022-06-27T04:51:35","guid":{"rendered":"https:\/\/prendergast.net\/?p=1560"},"modified":"2022-06-27T04:51:35","modified_gmt":"2022-06-27T04:51:35","slug":"news-bites-golds-price-floor-has-gone-up-what-this-means-for-newmont-the-worlds-largest-gold-miner-tom-palmer","status":"publish","type":"post","link":"https:\/\/prendergast.net\/?p=1560","title":{"rendered":"News Bites Gold&#8217;s price floor has gone up What this means for Newmont the world&#8217;s largest gold miner  Tom Palmer"},"content":{"rendered":"<div id='post-thumb'><img alt='' src='https:\/\/markethive.com\/uploads\/david-ogden\/images\/blog_322804.jpg' style='height:1px; width:1px' \/><\/div>\n<h1>Gold&rsquo;s price floor has gone up &#8211;&nbsp;What this means for Newmont, the world&rsquo;s largest gold miner &ndash; Tom Palmer<\/h1>\n<p><iframe loading=\"lazy\" frameborder=\"0\" height=\"329\" src=\"https:\/\/www.youtube.com\/embed\/XoaHeRgjeHk\" title=\"$1500-$1600 is gold's new price floor? This is where demand will come from - Tom Palmer\" width=\"730\"><\/iframe><\/p>\n<p>Tom Palmer, CEO of Newmont, said that gold&rsquo;s price floor has increased considerably over the past decade, making mining more lucrative as a result.<\/p>\n<p>&ldquo;We think, fundamentally, that the floor for gold has changed,&rdquo; he said. &ldquo;You typically have seen it sitting, probably for the last decade, at around $1,200 as a floor. I think the events of the last couple of years have changed that: the level of fiscal and monetary stimulus, the factors that are happening around Russia&rsquo;s invasion of Ukraine. Gold is more comfortably, I think, sitting with a floor of maybe $1,500 or $1,600.&rdquo;<\/p>\n<p>Palmer spoke with David Lin, Anchor and Producer at Kitco News, at the PDAC 2022 Convention in Toronto.<\/p>\n<p>Newmont&rsquo;s Costs and Revenues<\/p>\n<p>Newmont&rsquo;s cost guidance this year is $1,050 per ounce of gold. This assumes an $1,800 price per ounce of gold.<\/p>\n<p>&ldquo;Built into that [cost guidance] number are the higher taxes and royalties that you pay at that higher price,&rdquo; Palmer explained. &ldquo;If gold&rsquo;s price were to come down, then you&rsquo;re paying less taxes and royalties, so they&rsquo;re coupled to each other.&rdquo;<\/p>\n<p>U.S. inflation was 8.6 percent in May, and Newmont is taking this into consideration, said Palmer.<\/p>\n<p>&ldquo;We&rsquo;re starting to see some additional cost pressures coming into our business,&rdquo; he said. &ldquo;And we talked about it being about 5 percent over and above that number we guided to. We continue to watch that carefully&hellip; If we look further into the future, in probably 2024 we would see inflation coming down to long-run levels of about 2 to 3 percent.&rdquo;<\/p>\n<p>In terms of higher oil prices, Palmer explained that Newmont&rsquo;s base assumption is $60 per barrel, and that every $10 increase per barrel reduces his company&rsquo;s cash flow by $15 million.<\/p>\n<p>However, he added that, &ldquo;every $100 increase in gold price above the assumption that we make, means we generate $400 million of free cash flow every year&hellip; I talked earlier about our $1,800 assumption. [Gold] has spent a lot of this year at $1,900 to $1,950.&rdquo;<br \/>\n&nbsp;<\/p>\n<p>Drivers of Gold Price<\/p>\n<p>Palmer identified key supply and demand factors behind gold&rsquo;s price.<\/p>\n<p>&ldquo;For gold, there are less discoveries taking place, so there&rsquo;s less gold that&rsquo;s going to be produced going forward,&rdquo; he said. &ldquo;And then there&rsquo;s demand. One of the big demands for gold is jewelry in China and India. A growing middle class in both of those countries leads to greater demand for gold&hellip; I think you&rsquo;ve also seen more of a move to gold as a safe haven, as a result of the volatility over the last couple of years.&rdquo;<\/p>\n<p>To find out Newmont&rsquo;s plans for explorations and discoveries, and its ESG strategy, watch the above video.<br \/>\n&nbsp;<\/p>\n<p>By Kitco News<\/p>\n<p>For Kitco News<\/p>\n<p><a href=\"https:\/\/kms.kinesis.money\/signup?referrer=KM13461268\" style=\"color:#000080; text-decoration:underline\"><span style=\"color:#3b5998\"><span style=\"font-family:Tahoma\"><span style=\"font-size:medium\"><u><strong><span style=\"background-color:#ffffff\"><strong>Time to buy Gold and Silver on the dips<\/strong><\/span><\/strong><\/u><\/span><\/span><\/span><\/a><\/p>\n<p><\/p>\n<p>Tim Moseley<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold&rsquo;s price floor has gone up &#8211;&nbsp;What this means for Newmont, the world&rsquo;s largest gold miner &ndash; Tom Palmer Tom Palmer, CEO of Newmont, said that gold&rsquo;s price floor has increased considerably over the past decade, making mining more lucrative as a result. &ldquo;We think, fundamentally, that the floor for gold has changed,&rdquo; he said. &hellip; <a href=\"https:\/\/prendergast.net\/?p=1560\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">News Bites Gold&#8217;s price floor has gone up What this means for Newmont the world&#8217;s largest gold miner  Tom Palmer<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[290,291],"_links":{"self":[{"href":"https:\/\/prendergast.net\/index.php?rest_route=\/wp\/v2\/posts\/1560"}],"collection":[{"href":"https:\/\/prendergast.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prendergast.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prendergast.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prendergast.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1560"}],"version-history":[{"count":0,"href":"https:\/\/prendergast.net\/index.php?rest_route=\/wp\/v2\/posts\/1560\/revisions"}],"wp:attachment":[{"href":"https:\/\/prendergast.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prendergast.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prendergast.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}