NEW YORK, April 24 (Reuters) - The chief executive of Newmont Mining Corp (NEM.N), the world’s second-largest gold mining company, said on Thursday the price of gold could reach $1,100 an ounce in 2009.
CEO Richard O’Brien, who took over as head of the Denver-based miner last July, cited a host of bullish factors for gold including diminishing mine output, strong jewelry demand, inflation and the dollar weakness.
“I’m going to say gold is going to be in the $1,000 to $1,100 range next year,” O’Brien said in an interview on CNBC television.
U.S. gold futures for June delivery GCM8 ended $19.60, or 2.2 percent, lower at $889.40 an ounce on Thursday, while spot gold XAU= also traded sharply lower at $888 an ounce.
Gold has declined 14 percent since bullion hit a record high of $1,030.80 an ounce on March 17.
Earlier on Thursday, Newmont posted a five-fold jump in first-quarter profit on the back of record high precious metals prices. [ID:nN24510462]
However, Newmont could face negative net cash flow if the price of gold dropped further, O’Brien said.
“What we are trying to do is to generate cash throughout our business. When it gets into the $800 range, we are probably going to be net cash flow deficit,” O’Brien said.
“We are investing for the long run here. We have a business which is volatile, but one which we are committed to in the long run,” he said. (Reporting by Frank Tang; Editing by Marguerita Choy)