Monthly Metal Review
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- December 2017
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- September 2017
Gold and Silver
In London, the Gold P.M fixing rose to US$ 1346.75 per ounce on 29th of October 2010 (MTD: +3%, YTD: +20%), while Silver climbed to US$ 23.96 per ounce (MTD: +8.5%, YTD: +39,5%).
The gold price hit another high this month as concerns mounted about the economic outlook, leaving investors facing the question whether to buy gold bullion or shares from the mining companies themselves. Indeed, the rally in gold is helping other precious metals, with silver hitting a 30-year high of $24.90 per troy ounce.
Agnico-Eagle Mines has reported record gold production of 285,178 ounces during 3Q2010 compared with production of 118,763 ounces YoY. Production has been boosted by the introduction of two new mines, Pinos Altos and Meadowbank, during the past twelve months. Agnico-Eagle still expects to produce between 1 and 1.1 million ounces of gold this year.
IAMGOLD Corporation has announced the launch of a full Feasibility Study to review the expansion of its 90% owned Essakane mine in Burkina Faso. If the results of the Study are favourable, the expansion could have the potential to increase production at Essakane from the currently estimated life-of-mine average production of 315,000 ounces per year to an estimated 450,000 to 470,000 oz/y. The company declared commercial production at Essakane in mid-July this year and expects production at the mine to be 165,000 to 175,000 ounces of gold in 2010.
Centerra Gold has announced that operations have been suspended at its Kumtor mine in Kyrgystan, after unionized workers commenced strike action at the beginning of the month. For 2010, the mine was expected to produce 520,000 - 560,000 ounces.
South Korea, holder of the world’s fifth-biggest foreign exchange reserves, is considering buying gold to diversify its dollar-heavy portfolio. Even a small realignment of South Korea’s reserves would have a powerfully bullish effect on the gold market. With just 14 tons of gold - or 0.2% of its $290 billion reserves - Seoul is one of the smallest holders of gold among large economies. The world average is 10%, according to the World Gold Council, while countries such as the US, Germany and France hold well over 50% of their reserves in gold.
It comes as other Asian countries including China, India, Thailand and Bangladesh are stocking up on gold amid concerns that an escalating global currency war and a fresh round of quantitative easing in the US will drive the value of the dollar lower. South Korea holds 63% of its reserves in dollars.
With emerging market countries buying and central banks in Europe halting their sales of bullion, central banks are set to become net buyers of gold this year for the first time since 1988, according to GFMS, a precious metals consultancy.