Barrick's Munk Says U.S. Bailout Plan Will Support Gold Prices

By Rob Delaney and Stewart Bailey

Sept. 24 (Bloomberg) -- Barrick Gold Corp. Chairman Peter Munk said the U.S. government's $700 billion bailout of credit markets will erode the value of the dollar and support gold prices.

``That impact on holders of U.S. dollars in China or Russia or Abu Dhabi or Kuwait is that they're going to say, `What is that going to mean for the U.S. dollar, and what alternative are we going to have?''' Munk, 80, said today in a Bloomberg Television interview. ``So gold is going to have very powerful support.''

U.S. Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson told lawmakers this week that failure to pass a plan to buy troubled assets from financial firms would threaten markets and the U.S. economy.

Munk, the founder of Toronto-based Barrick, has been its acting chief executive officer since March, when Greg Wilkins stepped down because of illness.

Munk now leads Barrick's plan to dig mines in the Americas and Africa to maintain the company's position as the world's largest gold producer and benefit from seven straight years of price gains for the precious metal. Bullion prices have jumped by more than a fifth since Sept. 11 as investors sought a buffer from the credit crisis that destabilized Wall Street.

Barrick's standing as the largest gold producer and owner of the world's largest gold reserves will make it easy to attract buyers for its debt even as credit tightens, Munk said.

``We have to look long-term, and we have to make billions of dollars of investments,'' Munk said.

To contact the reporter on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net; Stewart Bailey in New York at sbailey7@bloomberg.net.

Last Updated: September 24, 2008 10:39 EDT