Gold Mining Industry Analysis
Gold Mining Industry Analysis
By: Robert
6/6/2010
The Gold Mining Industry has experienced a huge amount of growth since the beginning of the financial crisis. With the price of gold being at $639 in January 2007 before the beginning of the financial crisis and now in June 2010 the price of gold reaching $1220, there is no denying the interest of gold between investors and governments. Investors are seeking ways to protect themselves from inflation and any other type of financial crisis that may be on the horizon.
With the uncertainty that the world financial markets are facing over the next three years and the relation that gold has with the worlds currency, the U.S. dollar, it can be safely assumed that the price of gold will continue to rise and thus will mining ventures to harness this precious metal. As the price of gold rises the value of the dollar decreases and gold will continue to benefit from any type issue that the U.S. market is facing; with the May U.S. job data reporting that fewer jobs were added to the economy than was previously expected, this was able to send the price of gold over $1200.
This all bodes well for the gold mining industry and other related fields that deals with the supplying or selling of the precious metal. However, one must be aware that there is a huge supply of gold surpluses. “Since 2002, for example, total demand for gold from goldsmiths and jewelers, and dentists, and general industry, has come to about 22,500 tonnes. But during the same period, more than 29,000 tonnes has come on to the market. The surplus alone is enough to
produce about 220 million one-ounce gold American Buffalo coins.” (Christian Science Monitor 2010)
It is difficult to forecast what will be in store for this industry over the next three years because of intertwines with the market and the health of the world economies. However, with many experts assuming that there may be other financial crisis down the road one can safely assume
By: Robert
6/6/2010
The Gold Mining Industry has experienced a huge amount of growth since the beginning of the financial crisis. With the price of gold being at $639 in January 2007 before the beginning of the financial crisis and now in June 2010 the price of gold reaching $1220, there is no denying the interest of gold between investors and governments. Investors are seeking ways to protect themselves from inflation and any other type of financial crisis that may be on the horizon.
With the uncertainty that the world financial markets are facing over the next three years and the relation that gold has with the worlds currency, the U.S. dollar, it can be safely assumed that the price of gold will continue to rise and thus will mining ventures to harness this precious metal. As the price of gold rises the value of the dollar decreases and gold will continue to benefit from any type issue that the U.S. market is facing; with the May U.S. job data reporting that fewer jobs were added to the economy than was previously expected, this was able to send the price of gold over $1200.
This all bodes well for the gold mining industry and other related fields that deals with the supplying or selling of the precious metal. However, one must be aware that there is a huge supply of gold surpluses. “Since 2002, for example, total demand for gold from goldsmiths and jewelers, and dentists, and general industry, has come to about 22,500 tonnes. But during the same period, more than 29,000 tonnes has come on to the market. The surplus alone is enough to
produce about 220 million one-ounce gold American Buffalo coins.” (Christian Science Monitor 2010)
It is difficult to forecast what will be in store for this industry over the next three years because of intertwines with the market and the health of the world economies. However, with many experts assuming that there may be other financial crisis down the road one can safely assume
References: http://www.csmonitor.com/Money/Mises-Economics-Blog/2010/0531/If-gold-supplies-are-rising-why-aren-t-prices-falling http://in.reuters.com/article/idINIndia-49052520100604 http://www.safehaven.com/article/6906/the-dollar-gold-relationship http://www.newmont.com/our-investors/stock-data/stock-info http://www.gold-speculator.com/us-global-investors/28244-gold-group-represented-newmont-mining-best-performer-week.html http://www.thestreet.com/story/10737523/newmont-mining-tops-street-views.html