It’s more than likely global gold output set a record for the seventh year in a row last year, according to specialists in the field; however this year will be a turning point, with decreases expected.
A Thomson Reuters GFMS statement released recently showed that worldwide gold output climbed 1.7 percent in the first two quarters of 2015. On the GFMS total year predictions; they estimated a grand total of over three thousand tonnes, making last year the seventh record year on the trot.
There is a disclaimer however, and a sure sign that this stellar run is going to end pretty soon. The rise from 2014 was only 0.08 percent. This is opposed to an average yearly increase of 2.4 percent for the previous ten years.
The GFMS representative said, “There are a few reasons that are causing a bullish landscape in the medium term for gold output right now including a simple drop in production levels and grades, and also an unexpected lack of new gold discoveries.”
Speaking to mining executives over at Pana Mining Holdings Group several months ago, it seems their predictions of a drop in global gold output this year were spot on. They said a tightening of (their DELETE) investment in the fields of exploration and development has affected gold’s market value and seen it plummet by nearly half from its crest five years ago.
And it’s not only gold that is suffering. SNL Metals & Mining, a consultancy firm based in the US, have shown from their data that across the whole mining spectrum capital expenditure has dropped about 30 percent last year compared to three years earlier.
A main culprit was the drop in new discoveries, sliding by 60 percent at the end of 2015 compared to the previous quarter. And this was despite a jump in total metals exploration across the entire mining industry.
One upside late last year was the reduction in local costs like labor, power and fuel as a result of a weakening of many currencies versus the greenback. Production was encouraged by greater profit margins.
In those countries where the currency was hit hardest, there has been a noticeable effect on gold shares this year, for example in South Africa. The nation’s gold sector climbed an impressive 25 percent in the first fortnight of 2016 as the Rand dropped to record lows versus the greenback.
