The head of the world's second-biggest gold producer, Newmont Mining Corp., said on Tuesday gold prices could go even higher due to concerns about the U.S. economy and pressure on the dollar.

"Gold has a lot of headroom to grow, and we have a way to go in the current gold cycle," Newmont Chairman and Chief Executive Officer Wayne Murdy told reporters in Johannesburg.

Murdy said he would not estimate the gold price towards December and next year but that it would hover around current levels or better. Gold traded at $636 an ounce on Tuesday.

"When we look at the gold price, the factors driving the price have not changed much, the supply side has not improved and we see a flat to declining supply in the future," he said.

"There is strong physical demand from jewellers when the price goes below $600 per ounce," he added.

Murdy, who heads the Denver-based mining company, said the performance of the U.S. economy contributed to his expectations of a stronger gold price.

"Since gold is priced on an inverse relation to the dollar, we see continued weakening of the dollar versus Asian currencies mainly due to the huge trade imbalance with China, and we don't see that changing drastically," Murdy said.

He said the United States was spending some $60 billion more per month on imports than exports and that this had worsened its balance of payments, favouring a weaker dollar.

"The development of China, India and Brazil economies has also boosted demand for gold, making this a decade of commodities as opposed to the dot.com era of the 1990s," he said on the sidelines of a mining safety and health conference.

WEST AFRICA

Murdy said Newmont was positive about its exploration in West Africa and that the company had in Ghana alone a reserve of 18 million ounces by 2005, which it hoped would increase.

"We are doing exploration in West Africa and have been fortunate in Ghana. We continue to explore, and we feel we will be very successful in growing our reserve base," Murdy said.

Ghana is Africa's second-biggest producer of gold after South Africa, producing some 6.5 million ounces last year.

Newmont's potential production from Ghana is 950,000 ounces a year from two mines -- Ahafo, which is expected to produce between 225,000 and 250,000 ounces of gold this year, and a $525 million, 450,000-ounce-a-year site at Akyem.

Akyem has been hit by a delayed clearance on its environmental impact assessment approval by authorities, while projected start-up costs have been rising, Murdy said.

A merger in January between North American-based Barrick Gold and Placer Dome created the world's top gold producer and pushed Newmont to the number two slot.