Harmony confident of long-term upsurge in gold investment

Gold producer Harmony is confident that the long-term gold price trend will be upwards due to increased investing in gold.

In a presentation to analysts on Friday (October 15th), Harmoney said it expected the price of the metal would rise in the long term.

However, Graham Briggs, Harmony's chief executive officer, cautioned that the cost of producing gold was rising as a result of higher labour and energy costs.

Specific causes of the surge in overheads include the decision of South Africa's state power firm Eskom to increase prices and its inability to guarantee a constant supply of energy earlier in the year.

Inflation in South Africa in August, which was recorded at 13.6 per cent, was also a contributory factor.

In spite of this, the Harmony said it remained "bullish about the gold price".

"At 250,000 rand ($24,830) per kg, we should have a margin of 100,000 rand per kg," the group added.

Harmony is the third-largest producer of gold in South Africa and the fifth-largest in the world, with ventures in Australasia and Papua New Guinea as well as South Africa.

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