Global Gold Outlook
Spring/Summer 2008 - The Pause that Refreshes
Highlights
Investment Strategy: We believe that the greenback’s role as a reserve currency will continue
to decline in importance relative to alternatives such as the euro and gold. At the same time,
we suspect that central banks’ current aggressive reflationary efforts will place additional
pressure on currencies relative to hard commodities in the years to come. It is within this
context that we have highlighted some of the more immediate risks (moderating global
inflation expectations, a pause in the greenback’s downward trend, downward inflationary
pressures on disposable income) while maintaining our long-term bullish outlook for gold.
Emerging Markets: We believe the “energy and agflation” problem currently underway
across many EMs will have lasting power and inflation could remain a serious issue across
EMs over the next 1–2 years. This will necessitate EM central banks to shift monetary policy
priorities from growth to inflation. To cope, a mix of policy alternatives are likely to be
utilized: greater subsidization or price and export controls, tighter monetary policy via higher
interest rates and/or increasing policymakers’ tolerance of currency appreciation.
Technical: The secular bull case for gold remains as strong as ever. In recent months,
spiraling food and energy prices have stoked traditional inflation concerns, while ongoing
deflation in the credit markets has increasingly fueled fears of downstream monetary reflation.
Against this backdrop, bullion appreciated some 57% from last June’s low at $642.80 to the
recent high at $1017.50. From a technical standpoint, we believe there is a strong
likelihood that gold is now in the early stages of a multi-month consolidation phase after
its big nine-month advance. We profile Agnico-Eagle as one of the stronger gold names,
(i.e., those that made new all-time highs in March, and are currently trading well-above their
200-day averages) and Yamana as one of the weaker ones.
Fundamental: Supply fundamentals are expected to remain relatively stable in the near term,
with the exception of a moderate decline forecast for global mine production in 2008, as a
result of expected curtailment of production from South Africa (due to power constraints). On
the demand side of the equation, near-term weakness is expected for jewellery, largely due to
the combined impact of a slowdown in global growth, elevated gold price levels and price
volatility.
Investment Recommendation: Combining our view that a seasonal slowdown for gold demand is
around the corner in the summer months, and the possibility that the U.S. fed rate cutting cycle may
come to an end shortly, we believe the timing is right for investors to take profits in the short
term in gold and gold equities. We also would use a seasonally quiet period in June and July to
buy-back or add to existing gold equity positions as we expect a rebound in the gold price in the
period of seasonal strength in September–October.
From a fundamental perspective, we continue to favor gold companies with improving
production and cost profiles, gold reserve upside, active exploration programs and strong
management teams. Gold equities that we believe offer investors a combination of these
characteristics include: Kinross Gold, Harmony Gold, Centerra Gold, Jaguar Mining,
Central African Gold, Anatolia Minerals and Avoca Resources. Each of these companies is
profiled at the end of this report.

Table of Contents
Investment Strategy: A Pause in Our Positive Long-term Gold Story? ....................................3
Emerging Markets Inflation Back in Play ....................................................................................6
Strategy Implications ........................................................................................................................6
Implications .....................................................................................................................................8
The Gold Outlook: A Technical Perspective ..............................................................................10
Gold Likely Beginning A Multi-Month Consolidation...................................................................10
Fundamentals for Gold.................................................................................................................13
Supply and Demand........................................................................................................................13
Key Supply Drivers ........................................................................................................................14
Demand Drivers.............................................................................................................................15
Moving into a Seasonally Weak Period ..........................................................................................16
Gold Equity Investment Strategy ................................................................................................17
Fed Rate Cutting Cycle May Be Nearing an End ...........................................................................17
Net Speculative Gold Futures Position Poised for a Pullback ........................................................17
History Repeating Itself? Gold Reaches High Before Consolidation .............................................18
Best Ideas: Fundamental Analysis...............................................................................................19
Kinross Gold..................................................................................................................................19
Harmony Gold ...............................................................................................................................20
Centerra Gold.................................................................................................................................21
Jaguar Mining Inc. ..........................................................................................................................22
Central African Gold.......................................................................................................................23
Anatolia Minerals Development Limited........................................................................................24
Avoca Resources Ltd. .....................................................................................................................25
Appendix I: RBCCM Global Gold Equity Universe – Comparable Table..............................26
Appendix II: Valuation Methodology and Price Target Impediments ....................................32
Appendix III: Gold Equity Valuation Overview........................................................................36
Required Disclosures ....................................................................................................................37
Additional Disclosures....................................................................................................................40