Economic conditions across the globe have stagnated in the last few years amid a worldwide pandemic and the war in Ukraine, which caused energy prices to soar to never-seen-before highs. With most countries contending with increased prices and high costs of living, the world is firmly in the grip of inflation. It is during times like these that safe haven assets such as gold see an uptick in demand.
Since gold doesn’t depreciate in value regardless of economic conditions, investors have turned to the precious metal during times of economic upheaval to protect their wealth and preserve the value of their investments. Unsurprisingly, gold has remained relatively strong during the economic upheavals of the past few years. As February 2023 draws to a close, analysts expect that gold will maintain its relatively strong position and hold steady even as economic conditions decline.
Metals Focus head of mining supply Adam Webb notes that although there had been a small increase in mining production from 2020 to 2022, Russia saw an output decline of 30 tons in 2022. The Eastern-European country is the second largest producer of gold in the world. According to Webb, the reduction in Russian gold exports was caused by a shortage of finance and equipment among miners due to Western sanctions. Furthermore, Webb explained that mining companies such as Kinross went as far as halting operations at their Russian mines and exiting the country.
However, China stepped up its production of gold by 39 tons in 2022 and made up most of the supply deficit left by Russian producers.
Webb believes that gold output will increase by 3% as new mines come online in countries such as Canada, which will be launching new projects and expanding existing mines. He also noted that output in Africa will depend on individual countries.
Ghana is expected to increase its gold output significantly this year as new mines come online while South Africa, which saw reduced output last year due to worker strikes, is expected to boost its output in 2023.
On the other hand, countries such as Burkina Faso, which has recently dealt with security issues in the northeast, will see a reduction in output due to several closed mines.
Webb also expects declines in production from other countries as their gold mines reach the end of their lives.
Metals Focus’s Philip Newman is of the same opinion. He believes that gold prices will hold steady at $1,600 per ounce this year, based on the presumption that inflation will reduce. He noted that while improving economic conditions may put some pressure on gold, investor interest may lead to bargain hunting to support gold prices.
The changes in the macroeconomic environment within the United States and the world are likely to be watched closely by precious metal exploration companies such as Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) since these conditions could influence the market dynamics that determine whether a project can be profitable in the medium term or extraction can wait for better circumstances to prevail.
NOTE TO INVESTORS: The latest news and updates relating to Arizona Metals Corp. (TSX: AMC) (OTCQX: AZMCF) are available in the company’s newsroom at https://ibn.fm/AZMCF
About MiningNewsWire
MiningNewsWire (MNW) is a specialized communications platform focused on developments and opportunities in the global resources sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to millions of social media followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled visibility, recognition and brand awareness. MNW is where news, content and information converge.
To receive SMS text alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.miningnewswire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.miningnewswire.com/Disclaimer
MiningNewsWire
Los Angeles, California
www.miningnewswire.com
310.299.1717 Office
Editor@MiningNewsWire.com
MiningNewsWire is part of the InvestorBrandNetwork.
