THE stronger Australian dollar exchange rate has wiped out any benefits gold producers might have reaped from higher prices of the precious metal.
Even though the price of gold had strengthened by 10 per cent since early July to about $US1,000 per ounce, gold producers in commodity-linked currencies like Australia and Canada have not seen any benefits, a report Resource Capital Research found.``The gold price for producers in Australian dollars and Canadian dollars has gone nowhere in the last three months,'' the equity research firm said.
The Australian dollar has rebounded more than 40 per cent against the US dollar, since falling to 61 US cents in October 2008.
Gold share indicies were currently 30 to 40 per cent above September 2008 levels but were unlikely to appreciate much further this year, Resource Capital said.
There are three key factors affecting the gold price - positive sentiment in equity markets, inflation concerns and ongoing US dollar weakness.
``We expect to see gold trading between $US950 per ounce and $US1,000 per ounce for the rest of 2009, with some stability returning to the US dollar,'' Resource Capital senior gold analyst Dr Tony Parry said in a statement on Friday.
``Inflation fears are probably premature but may well push gold back above $US1,000 in mid 2010.
``However, we do not subscribe to the $US1,500 or $US2,000 per ounce scenarios.
``Supply-demand fundamentals will get in the way,'' Dr Parry said.
The local spot price of gold at 1022 AEST was $US999.20 per fine ounce, down $US7.75 from Thursday's closing price $US1,006.95 per ounce.
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