Newcrest Mining, the world's No.3 gold producer, expects gold to trade as high as $2,500 an ounce and retain its safe harbour status for as long as the world's financial system remains in crisis mode.
Newcrest chief executive Greg Robinson told a business lunch on Thursday gold will remain a hedge against a global financial breakdown, citing risks such as a devaluation of the U.S. dollar, the global currency, European economies in dire shape and persistent political tensions throughout the globe.
He pegged bullion to trade between $1,500 and $2,500 an ounce over the next five years.
For all investors, gold is an insurance against a breakdown in the international financial system, Robinson said.
Gold is trading around $1,747 an ounce, close to two-month highs, following a surge in January amid concerns about the euro zone debt crisis.
Robinson's view was in line with U.S. Gold Corp's outlook for gold prices, although an analyst said $2,500 may be too bullish.
That sounds pretty high to me, but maybe I'm more conservative than him, said Keith Goode, a gold analyst at Eagle Research Advisory, adding that $1,800 to $2,000 may be a more realistic range.
Robinson said he expected the gap between soaring gold prices and share prices of gold miners to narrow with miners' share prices rising rather than gold prices falling.
Newcrest share have fallen close to 10 percent since mid-November. Spot gold over the same period is down less than 3 percent.
Newcrest expects to produce 2.43 million to 2.55 million ounces of gold in the 2011/12 financial year from its mines in Australia, Papua New Guinea and Indonesia.
Robinson also said preliminary studies on a promising prospect in Fiji were taking longer than expected due to consultations with local residents.
Newcrest is the manager and 69.94 percent owner of the Namosi joint venture, which contains the Waisoi deposit, said by some geologists to be one of the world's biggest undeveloped gold and copper deposits.
Newcrest last estimated the deposit holds a total resource of 7.9 million tonnes of copper and 7.7 million ounces of gold.
Outside of gold, Robinson reiterated that Newcrest would not look for copper-only acquisitions in contrast to rival Barrick's takeover of Equinox last year.
That's certainly not something Newcrest's going to pursue, he said.