The gold industry has done well during coronavirus outbreak that is affecting a lot of other industrial sectors around the world. According to Assets Monitor’s latest record, this was to be expected because gold is a safe-haven investment that thrives in times of crisis.
The gold price has been on the rise for the past year and unlike other commodities, this precious metal is continuing to rise this year. It is expected to rise out the Coronavirus storm betted than most commodities.
According to data from Market insiders, the gold price rose by a whopping 12% between Jan 1 and May 8 of this year. This is higher than other metals like iron. It is a great time to be a gold miner in Australia right now. Mining companies that seem to be doing well include:
Newcrest Mining, Saracen Mineral Holdings, Silver Lake Resources and Northern Superstar Resources. These companies have been posting impressive margins in this current crisis. Strong prices and margins make it easy for Australian gold miners to expand their existing operations. This fact is reflected in the expansion plans that Newcrest has for its Cadia Valley’s operations and Saracen’s development plans for the Carosue Atteinte mine in Western Australia.
Other companies, such as Atrodo Resources, Capricorn Metals and Regis and are also developing new gold projects.
At this rate, it looks like Australia will outperform China as the top gold producer in the world next year. This is due to its expansion plans as well as the gold price that has been doing so well recently.
According to Resources Monitor, an information company that focuses on the Australian gold mining industry, the cost-effectiveness of Australia’s mining industry gives it an exceptional advantage to overtake China in the race to be the best.
This is good news for investors who have a stake in the country’s mining industry. Overall, it is good news for the sector which has been worrying about nearing peak gold levels
Data from Resource Monitor, shows that the gold price has been on the rise for the past 1.5 years. Australian gold mining companies have been making attractive margins during this period. These rising margins and the rising price of gold has encouraged companies to work harder on expansions projects. Now more than ever, the industry is hopeful that the peak production estimates will not be reached in as previously predicted and that mining can still thrive in Australia. It looks like even as some old gold mines have shut down new ones might be opening up soon as companies are encouraged to explore new opportunities.
Everybody is wondering what gold with do next. Will it continue to be strong?
This cannot be said with absolute certainty. The gold mining sector has always had its bulls and bears. The bears are seeing gold as an overpriced commodity and the bulls are certain that the price of gold can still exceed USD$2, 500 an ounce this year. Only time will tell but so far, the future looks good.