The uncertainty amid the COVID-19 pandemic has caused a surge in the price of gold, reaching more than $1,733 per ounce at 0900 GMT Thursday.
The price of gold at the beginning of the year hovered around $1,500.
The precious metal has risen steadily on average this year to date, as the economic crisis sparked by the coronavirus pandemic has boosted demand for the safe-haven asset.
The price of gold has been steady on Thursday, with the metal caught between a strengthening U.S. dollar and a pullback in global equities, as worries that new coronavirus cases could jeopardise an economic recovery weighed on markets.
Investors have started to buy gold because they see it as a sound financial investment during a crisis and also to avoid the negative effects of inflation.
Forecast
Overall global consumption will rise in 2020 owing to exchange traded funds (ETFs).
Inflows in ETFs backed by gold reached a record high in April.
Spot gold prices are up by 12% this year on the London Metal Exchange (LME).
According to a recent Bank of America Corporation (BofA) report ‘The Fed can’t print gold’, the price of one ounce of gold will hit $3,000 in 18 months.
This estimate is 56% higher than gold’s historic record in September 2011 when the price peaked at $1,921.
Gold output
Many countries are desperately trying to apply measures that can stem the economic impact of the pandemic; including stimulus packages or bailouts for businesses.
In Ghana, gold output from the large-scale mining sector increased 6% to 2.989 million ounces in 2019 from 2.807 million ounces in 2018, according to the annual report of the Ghana Chamber of Mines.
During the period, small-scale production decreased to 1.588 million ounces in 2019 from 1.984 million ounces in 2018.
The 20 per cent fall in the small-scale mining sub-sector resulted in an overall decline in total gold production to 4.577 million ounces in 2019 from 4.792 million ounces in 2018, Eric Asubonteng, President of the Ghana Chamber of Mines, said in the report during a virtual annual general meeting.
The large-scale sector improved on its contribution to national gold production, from 59 per cent in 2018 to 65 per cent in 2019 whereas the small-scale sector accounted for 35 per cent of national gold production in 2019; a decline from 41 per cent in 2018.
Ghana recently overtook South Africa as Africa’s largest gold producer.
Ghana’s gold output of 4.8 million ounces in 2018 surpassed South Africa’s 4.2 million ounce total for the first time.
Reopening of Obuasi
In January this year, President Nana Addo Dankwa Akufo-Addo, re-opened the Anglogold Ashanti gold mine in Obuasi.
The Obuasi mine had been closed in effect since 2014.
Reopening the mine, President Akufo-Addo said, “In order to help AngloGold Ashanti secure the needed investment for this project, Government had to provide a number of fiscal incentives, and guarantee the stability of the project against changes in the legal environment, especially in the early years of the mine’s operations.”
The president added, “It is expected that all the agreements reached, including the vigorous implementation of domestic content policy, will be scrupulously honoured and performed. The initial investment in the redevelopment project is $881 million, with a total investment of $1.6 billion projected for the entire 22-year life of the mine. The whole investment package has been approved by Parliament.”
Production from Obuasi is forecast at 350,000 to 450,000 ounces of gold annually during the first ten years.
The Obuasi operation “will be an engine for growth”, said AngloGold CEO Kelvin Dushnisky in September 2019. The company is investing as much as $500 million to revive the mine.
