Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

RPT-Stronger greenback helps boost Australian gold

Published 31/08/2015, 07:45 am
RPT-Stronger greenback helps boost Australian gold
XAU/USD
-
EVN
-

(Repeats story first published on Sunday; no change to text)

By James Regan

SYDNEY, Aug 30 (Reuters) - A stronger U.S. dollar is helping drive Australian gold production and buffeting local prospectors from the effects of a global sell-off in bullion, according to a sector survey released on Sunday.

Production of the precious metal in Australia rose by 4 percent in the second quarter to 72 tonnes versus the previous quarter, second only to China, mining consultants Surbiton Associates Pty Ltd said in its latest tally of Australia's gold mining industry.

A stronger greenback is playing into the hands of Australian prospectors, with the bullion price in Australian dollar terms XAUAUD=R relatively stable since the start of 2015, according to Surbiton's director, Sandra Close.

"Despite lower gold prices in U.S. dollar terms, the depreciation of the Australian dollar is proving a blessing for Australian gold producers," Close said.

"Although the gold price XAU= averaged U.S.$1,192 per ounce in the June quarter, the Australian dollar gold price averaged A$1,532 per ounce," she said.

Australia's gold output over the 12 months to June 30 rose 1 percent to 285 tonnes, which at today's prices is worth about A$14 billion ($10.05 billion).

China is estimated to have produced around 450 tonnes in calendar 2014.

A looming U.S. rate hike has long dimmed the appeal of non-interest bearing assets such as precious metals, and gold on Friday posted its biggest weekly drop in five weeks after robust U.S. economic data suggested stronger growth.

But in Australia, gold still shines.

"We feel we are in terrific shape," said Jake Klein, executive chairman of Evolution Mining EVN.AX , which has spent close to A$800 million ($574 million) buying mines in Australia this year and reported an 112 percent rise in underlying profit in fiscal 2015.

"The balance sheet is strong and the gold price is A$100 an ounce higher than we achieved last year," Klein said. ($1 = 1.3935 Australian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.