Barrick CEO sees gold prices well supported

NEW YORK (Reuters) - A lower gold supply and strong jewelry demand will continue to support higher prices of bullion, the chief executive of Barrick Gold Corp. (ABX.TO: Quote, Profile, Research, Stock Buzz) said on Tuesday.

Greg Wilkins, CEO of Barrick, the world's No. 1 gold producer, said he expected the gold mining industry would be challenged to maintain the current production level, and miners would need higher metal prices to justify their capital investments.

Speaking at the Reuters Mining and Steel Summit, Wilkins said that he saw the current gold prices were seen to be sustainable.

"I think the gold prices certainly traded into a new regime," said Wilkins, adding that supply would underpin higher prices in the long run.

"On the demand side, in particular, we continued to see good demand on jewelry, which is obviously the key consumer of gold."

Wilkins also cited diversification from central-bank reserves into gold and robust demand from bullion investors.

"We should be in a fairly robust gold environment for some time to come."

Spot gold <XAU=> traded at $659 an ounce on Tuesday.

He said that the industry was currently in a higher operating and capital cost regime, which required loftier, sustainable metal prices to justify any type of capital investment.

Wilkins said that he expected lower gold production to keep prices firm.

"I think over time we are going to see the industry be challenged to continue to maintain production levels."

"Therefore, I think the supply side will continue to support the current and higher gold price levels," Wilkins said.