Record gold price in Australian dollar blessing and curse at the same time

In Australian dollars, the price of gold has been at record levels for some time now. And as it turns out now, this is both a blessing and a curse for the industry Down Under. In fact, gold output from Australian mines in the past quarter fell to its lowest level for a year. According to Melbourne-based experts from Surbiton Associates, 78 tonnes of the yellow metal were mined on the fifth continent between July and September, a drop of around 5% on the second quarter. In fact, this was also the lowest quarterly production since the first quarter of 2018, which was affected by heavy rainfall, Surbiton said.

Two factors in particular contributed to the decline in output, the experts explained. The first was production disruption due to unexpected technical problems and planned maintenance, and the second was the high gold price in Australian dollars. As the analysts stated, the Australian spot gold price averaged AUD 2,150 per ounce in the September quarter. In the second quarter it was only AUD 1,870 per ounce and in the first quarter of 2019 approx. AUD 1,830 per ounce. And one effect of the increased price is that it allows some mines to lower the content of processed material by adding material from lower gold content stockpiles or mining ore with lower gold content – thus extending the mine’s life.

However, Surbiton believes that Australian gold production could recover in the fourth quarter of this year as some mining problems are likely to be resolved and new gold producers added.

However, another uncertainty that long overshadowed the Australian gold sector has now disappeared after Saracen Mineral Holding (WKN A0MN37) acquired Barrick Gold’s (WKN 870450) 50% stake in the Super Pit in Kalgoorlie. According to Surbiton, this deal means that Australian control of the domestic gold industry will rise to almost 60%. In 2002 this had reached a low of 30%.

Note on risk: The contents of www.goldinvest.de and all other information platforms used by GOLDINVEST Consulting GmbH serve exclusively to inform readers and do not represent any kind of request for action. They are to be understood neither explicitly nor implicitly as an assurance of possible price developments. Furthermore, they do not in any way replace individual expert investment advice, but rather advertising / journalistic texts. Readers who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. The acquisition of securities involves high risks, which can lead to the total loss of the invested capital. GOLDINVEST Consulting GmbH and its authors expressly exclude any liability for financial losses or the guarantee of the topicality, correctness, appropriateness and completeness of the articles offered here. Please also note our terms of use.

According to §34 WpHG we would like to point out that partners, authors and/or employees of GOLDINVEST Consulting GmbH can hold or hold shares of the mentioned companies and thus a conflict of interest can exist. Furthermore, we cannot exclude the possibility that other stock exchange letters, media or research companies may discuss the values discussed by us during the same period. Therefore, symmetrical information and opinion generation may occur during this period. Furthermore, a consulting or other service agreement may exist directly or indirectly between the companies mentioned and GOLDINVEST Consulting GmbH, which may also result in a conflict of interest.