Tectonic Metals gets funding for gold exploration in Alaska
The company's Flat gold project is located 40 km north of the giant Donlin gold project.
Buying in China and India, central banks increasing reserves and particularly dwindling gold production could potentially drive the gold price to US$5,000/oz says a new report by investment bank Standard Chartered.
The report notes that just 1.8% of China’s foreign exchange reserves is currently held in bullion. If the country were to bring it in line with the global average of 11%, it would have to buy 6,000 tonnes of gold, equivalent to more than two years of gold production.
Another factor that could push the gold price higher is that reserves could run out in less than 20 years at current rates of production: figures from the US Geological Survey estimate global gold reserves at the end of 2010 stood at 51,000 tonnes – 19.2 years of production at 2010’s production rate according to the report’s estimates.
The report, which studied 375 mines around the world, also shows that while exploration budgets have risen since 2002 (with the exception of 2009) in response to rising prices, the rate of new gold discoveries have continued to decline.
The report is in contrast to Bank of America Merrill Lynch’s monthly survey of fund managers released on Wednesday – 37% of managers believed gold is overvalued at the moment, more so than at any time since December 2009.
