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Evolution warns of volatile gold prices

AAP logoAAP 23/11/2016

Evolution Mining has warned of volatile short-to-medium term gold prices as the world enters "uncharted economic territory" in the wake of Donald Trump's election as US president.

Nonetheless, executive chairman Jake Klein has told Evolution's annual general meeting that gold remains a good long-term bet in the wake of Mr Trump's poll triumph and Britain's vote to leave the European Union.

"Both the Brexit vote and Donald Trump's election win in the United States completely wrong-footed financial markets" Mr Klein told shareholders on Thursday.

"These events present investors with complex decisions and, potentially, new paradigms as we navigate unchartered economic territory."

Mr Klein noted that, while the price of gold rose in June following the UK's vote to quit the EU, it dropped after this November's US election.

"Based on history, gold responded as expected to the Brexit vote but its reaction to Trump's election win was an entirely different story," Mr Trump said.

"Markets have cheered on the Trump victory in anticipation of stimulatory economic policy in the form of reduced regulation, lower corporate taxes and, potentially, trillions of dollars of fiscal stimulus through infrastructure spending without any immediate concerns around the inflationary effect of these policies."

Mr Klein reiterated Evolution's full-year gold production guidance of 800,000 to 860,000 ounces at an all-in sustaining cost of $900 to $960 per ounce, and said the company expects to improve that over the coming years..

At 1015 AEDT, Evolution shares were down 11.5 cent, or 5.58 per cent, at $1.945, amid general weakness in the gold sector.

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