Randgold Resources CEO Mark Bristow told Jim Cramer on Monday that he expects gold prices to shine in the long run.
"There are a lot of things impacting gold at the moment. I have always said that gold will be very volatile for the next two or three quarters, but ultimately the fundamentals are very strong for a rise in gold price," Bristow told the "Mad Money" host.
Randgold's price initially soared on the panic surrounding Brexit, Bristow said, followed by confusion surrounding the outcome of the American presidential election. Thus, as the stock market continues to roar higher since President-elect Donald Trump's victory, the price of gold has been hit hard.
However, a bet on Trump could translate into investors buying gold. Trump has said he plans for tax cuts and infrastructure spending, which means the government may need to borrow a lot of money. This could prompt the economy to accelerate, and inflation to rise.
When inflation rises, people buy gold. It's that simple.
We focus on value, and I think that keeps us disciplined, is that focus on profitability.Mark BristowCEO of Randgold Resources
"No one expected the outcome of the American elections and that has created a lot of confusion, and the market is trying to find its way," Bristow said.
Randgold Resources is the gold miner known for its low production costs and ability to find gold in regions where other players won't go. It has five mines across Mali, the Ivory Coast and the Democratic Republic of Congo.
When Randgold reported earlier in the month, it had a 7 percent production increase versus the previous quarter, and its average cost per ounce declined by 9 percent over the same period. Basically, it spent less money to produce more gold. Management also provided a bullish long-term outlook, which Bristow attributed to its focus on the long term.
"We focus on value, and I think that keeps us disciplined, is that focus on profitability. You know that we are the only gold miner that is never impaired. We have never cut our capital, we have never cut our expiration budget, and neither have we retrenched our workers because of a lower gold price," Bristow said.
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