Gold News

Rising gold bullion prices spur Lihir's profits

Lihir Gold Ltd, Australia's second-largest gold producer, has moved from loss to profit in the first half, largely on the back of rising gold bullion prices.

The company announced that its net income was $36.5 million in the six months ending at June 30th, also boosted by its closing of forward sales contracts.

Chief executive officer Arthur Hood suggested that he believed Lihir would post even stronger results for the full year, based on an increasing gold price and associated strong investing in gold.

He said: "We are confident of reporting a solid improvement in operating cash flows and net profit after tax [for 2008 as a whole].

"Conditions in the gold sector and in the global economy in general remain conducive to a firm gold price.''

Meanwhile, some market commentators are suggesting that the mini-resurgence in the dollar may be over as the global liquidity crisis shows no sign of abating.

The natural consequence of such a trend is that gold prices will remain stable at worst or rise gradually at best over the coming months as the economy struggles.

Liran Kapeluto, a senior dealer at trading-system operator Finotec Training UK Ltd, said: "The major effect on gold is coming from the weakening dollar. It is pushing commodities up."


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