Despite the recent slide in the price of gold, the yellow metal will ultimately go higher and over time reach a level close to US$1,500/oz, the CEO of Toronto-based Yamana Gold, Peter Marrone, told BNamericas.
"I wouldn't characterize myself as anything other than bullish on gold, it would be impossible to predict on a quarter by quarter, month to month, or day by day basis what the gold price will be. But even if the circumstances have changed a little bit, the overall program has not," Marrone said.
Gold slipped 1.04% to US$713/oz on the London Bullion Market on Friday, its lowest level in more than a year.
According to Barclays Capital, the decline in the price was brought on by further pressures from a strengthening US dollar compared to most other currencies.
In March this year gold reached a nominal record of US$1,011/oz.
"I don't believe that is the ultimate high-water mark for gold. Over time the US$1,500/oz gold price is not unrealistic," Marrone said.
Given the current market conditions there will be potentially long delays with some smaller and medium scale miners, and also development stage companies that expected to put projects into production, according to Marrone, adding that this future shortage of expected gold supply will in turn support gold prices.
Toronto brokerage Blackmont Capital forecasts a gold price of US$850/oz for the remainder of 2008, 2009 and the long-term.
Yamana (TSX: YRI, NYSE: AUY) has producing gold assets in Brazil, Chile, Argentina and Honduras.
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