Stronger greenback helps Aussie gold hold on to its luster
Last Updated: 2015-08-30 18:53 | Reuters-Global Times
A stronger US dollar is helping drive Australian gold production and buffering local prospectors from the effects of a global sell-off in bullion, according to a survey of the sector released on Sunday.
Production of the precious metal in Australia rose by 4 percent in the second quarter to 72 tons versus the previous quarter, second only to China, mining consultants Surbiton Associates Pty 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 relatively stable since the start of 2015, according to Surbiton's director, Sandra Close.
"Despite lower gold prices in US dollar terms, the depreciation of the Australian dollar is proving a blessing for Australian gold producers," Close said. "Although the gold price averaged $1,192 per ounce in the June quarter, the Australian dollar gold price averaged A$1,532 ($1098.60) per ounce."
Australia's gold output over the 12 months to June 30 rose 1 percent to 285 tons, which at today's prices is worth about A$14 billion.
China is estimated to have produced around 450 tons in 2014.
A looming US 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 US economic data suggested growth was stronger than expected.
But in Australia, gold still shines. "We feel we are in terrific shape," said Jake Klein, executive chairman of Evolution Mining, which has spent close to A$800 million buying mines in Australia this year and reported an 112 percent rise in underlying profit in fiscal 2015.
