Business

Gold Mining Production Slips But Gold Prices Soar

For some time now, there has been talk of the world reaching peak gold. We’ve also seen a number of mines shutting down because there isn’t much gold that is easily accessible and digging deeper into the ground is becoming more expensive and unsustainable. One of the reasons why the price of gold has been going up over the last couple of years is because the demand for the yellow metals has grown whilst the mining output has been declining. However the supply of scrap gold has been rising by as much as 11%. There are more people who sell gold Brisbane to cash in on the rising price of this yellow metal. The gold recycling industry is seeing gains it hasn’t seen in over 7 years.

According to analysts, 2019 was the first year since the global crisis of 2008 that the mining production declined by over 1%. The last time mining output was impressive was in 2009, however since then things have been bleak for the mining industry. The world has changed so much since the gold rush in the 1800s. Over the last few years, there have been fewer mining discoveries. The decline in mining output has created a pseudo-gold rush with gold dealers, pawn shops and anyone who has a brilliant idea and some insight into how the gold industry operates wanting a piece of the action. The dynamics of supply and demand are advantageous to the price. This is positive for investors. Gold prices rose by 9.7% in U.S Dollars which is a record high for mining countries like Australia and Canada. 

The figures that analysts work with do not take into account small-scale mining operations or artisanal mining which is hard to track because people who are involved in it operate outside the formal gold industry. The gold that comes from scrap gold dealers is only also not taken into consideration. Artisanal mining provides a livelihood for millions of poor people in third world countries, however, because artisanal miners do not work within the law, they often disregard environment hazards that their operations produces. A lot of harmful chemicals end up leaking into the ground affecting the soil and water. Artisanal miners work under appalling conditions and they often have to smuggle the gold they get. It’s because of illegal activities like that that reputable gold refineries do not like accept gold doré from countries like Peru, Canada and some African countries. 

Analysts also don’t take into account the amount of gold that is already in the hands of ordinary folk who sell gold Brisbane for money to gold dealers. Although refineries deal with scrap gold that cash-for-gold dealers sell they will need to find some way to incorporate small scale miners as it has accommodated scrap gold dealers to strike a balance with the dwindling supply from the formal sector. Australia has a vibrant gold cash-for-gold industry with dealers setting up shop in major cities like Brisbane and smaller surrounding towns. These are becoming an integral part of the gold industry. They help balance the supply of gold.

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