Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Gold Production Drops Sharply in Australia

  by    0   0

Gold supply took another hit, as output in Australia mine production slumped in the first quarter of this year.

Output fell 8% in Australia, according to data released on Sunday by Australian mining consultancy Surbiton Associates. Australian mines produced 71.5 tons in Q1. This was a drop from 77.5 tons in the previous quarter.

Analysts blamed bad weather for the slump.

This year heavy rain in Western Australia, which accounts for about three-quarters of Australia’s gold output, plus the effects of Cyclone Debbie in Queensland in late-March, played havoc with gold production at many operations across the country,” Surbiton director Sandra Close told Reuters.

Australia ranks as the world’s number two gold producing country behind China.

Mine output also dropped sharply in China in the first quarter. According to a rare report issued by the China Gold Association, the country’s first quarter gold production dropped  9.3% year-on-year, falling from 111.563 tons in Q1 2016 to 101.197 tons this year. Meanwhile demand surged 14.7% in the Asian nation.

Weather was not to blame for the drop in Chinese production. Analysts say the country is in the process of phasing out antiquated production facilities. The shutdown of old and unprofitable mines could mean a long-term drop in China’s gold output.

Interestingly, the Reuters report pointed out that many Australian mines have had to transition to more difficult mining techniques as the easier to reach gold near the surface has already been dug out.

Gold ore mined in Australia is often hauled from underground shafts to the lower levels of previously mined open pits, with wet weather slowing operations due to slippery haul roads.

While analysts primarily blame the weather for Australia’s Q1 production slump, it fits into a broader pattern of declining gold production. Worldwide production plateaued in 2016 and many analysts believe the world may be at or nearing “peak gold,” meaning  the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s.

Investors tend to focus on the latest economic and political news, the most recent Federal Reserve announcements, and current price trends when considering whether or not to buy gold.  But they should never ignore the most fundamental dynamic in any market – supply and demand. If we really are nearing peak gold, and global production continues to decline, it will undoubtedly put upward pressure on prices in the long-term if demand remains constant or increases. It’s simple economics.

WhyBuyGoldNowBanner.070815.590

Get Peter Schiffís latest gold market analysis click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

China’s Gold Market Continues to Recover

Chinese gold imports have nearly returned to pre-pandemic levels and the world’s biggest gold market continues to recover. According to the latest data reported by the World Gold Council, China imported 67.6 tons of gold in May. That was 65 tons higher than May 2020 and only three tons lower than May 2019, before the […]

READ MORE →

US Government Spending Sure Isn’t Transitory

The mainstream narrative is that the Fed will soon admit that inflation isn’t transitory. At that point, it will raise interest rates and taper its bond-buying program to fight rising prices. But this narrative ignores the elephant in the room – the ever-increasing national debt. In June, the US government ran another big deficit of […]

READ MORE →

“Transitory” Inflation Comes in Hotter Than Expect. Again.

For the sixth month in a row, Consumer Price Index (CPI) data came in much higher than expected. But the question remains: how long will the Fed keep up the “transitory” inflation narrative? And when they do abandon this storyline and acknowledge inflation, what can the central bankers really do about it? The CPI surged […]

READ MORE →

Many Indians Depend on Gold to Stay Afloat During Pandemic

Gold has served as a lifeline for Indians pummeled by the economic storm caused by the government response to the coronavirus pandemic. The Indian government’s response to the first wave of COVID-19 ravaged the economy. As a result, many banks were reluctant to extend credit due to fear of defaults. In this tight lending environment, […]

READ MORE →

Stimulus Checks Run Out; Americans Whip Out Their Credit Cards

What do you do when that stimulus money runs out? You whip out the credit card. Consumer debt was up 10% in May, according to the latest data from the Federal Reserve, and we saw a big jump in credit card balances for the first time since February 2020.

READ MORE →

Comments are closed.

Call Now