The price of gold reached a six-year high last month, peaking at $1537.80 USD an ounce. Gold has been on an upward trajectory since the end of 2016, and it’s possible that this price will continue to increase. Some analysts have even speculated that the price could reach as high as $1600 an ounce in the next year. This is good news if you’re a gold producer, just as long as you’re optimizing your current gold recovery systems.
Gold Prices In The Last Decade
The price of gold hit an all-time high in 2011, reaching just shy of $2000 an ounce. Unfortunately, the next five years weren’t so great for the yellow metal. The price bottomed out in 2016 at $1070 an ounce. As is typical, healthy worldwide economies and a strong American dollar coincide with low gold prices.
Since gold is a zero yield asset, it doesn’t pay dividends to investors. When economies are healthy and growing, investments are usually poured into other areas of a thriving market. When a threat to the market raises its head—for instance when Great Britain voted to leave the EU—economic uncertainty causes people to turn to gold for safety. In this instance, the price of gold rose by $100 in a mere six hours.
Just as a strong dollar and high interest rates drop the price of gold, the opposite is also true. In the past few months, we’ve seen a weaker dollar amid global financial uncertainty. Investors have been worried about the US economy falling into a recession. With lower interest rates, gold becomes a safe and attractive investment option. As more people invest in gold, the price goes up.
Gold Recovery In The Last Decade
Another reason for fluctuating gold prices is global supply and demand. Countries like China and Russia have been increasing their gold reserves. Central banks are purchasing gold at the fastest rates since 2013. And India, the second-largest gold consuming country, increased their gold purchases alongside a lower rupee-denominated gold price. Even with a global increase in gold production, there is enough demand to keep prices high.
Many countries are in the midst of setting record level high gold prices. In Canada, gold is sitting at over $2000 CAD per oz, and in Australia it’s at $2200 AUD per oz. This reflects that both the demand and value of gold is on the rise.
There can also be situations where the price of gold is high in US Dollars and low in other currencies. This can be explained by a weakened US dollar, and a global decrease in the value of gold from oversupply. The devaluation in gold is just hiding behind a weakened US dollar. Sneaky!
Taking Advantage Of Gold Prices
If you’re a gold producer looking to take advantage of rising prices, there’s no better time to optimize your gold recovery process. At Sepro, our experts know how to maximize gold recovery by using the right equipment at the right time in the recovery circuit. We’ve helped companies like TMAC Resources hit record-level gold recovery rates which have now lead to positive earnings for the very first time.
To improve your gold recovery rates, contact the experts at Sepro. We’ll analyze your current operation and help optimize it so you can take advantage of the rising price of gold.