The price of gold has been rising since the coronavirus crisis began, which is the usual pattern in times of uncertainty as people seek what they believe is a hedge against uncertain financial markets.
Assets such as government bonds and gold are generally viewed as safe havens for investors. When there is uncertainty and challenging market conditions, investors tend to rush their investments from riskier assets to havens.
In the current market conditions, gold has found itself back near highs as stocks and bonds across the globe continue to remain under pressure. The Ghana Chamber of Mines has assured that despite the devastating effects of the novel Coronavirus, the mining sector is confident of improving on last year’s production of over 4 million ounces of gold.
According to its Chief Executive Officer, Sulemanu Koney, the chamber is still in the process of collating production figures from the various mining firms, however, it expects production from member firms to be higher than 2019’s figure.
This spells good news for the economy since the price of the precious metal has spiraled with the outbreak of the novel coronavirus and the subsequent collapse of stock markets. Analysts say that flurry of stimulus measures announced across the world will keep gold supported.
Gold is maintaining its centuries old role as a safe haven and store of value in troubled times. Sulemanu Koney told the B&FT that the coming on stream of AngloGold Ashanti’s Obuasi Mine coupled with the strong demand for gold on the international market is bound to contribute to the expected increased production.
Last year, large scale miners – Chamber members – contributed over 2.8million ounces, with the rest of the country’s gold output coming from small scale and artisanal miners. The precious metal this week went for about US$1,703.95 per ounce, with a gram also going for US$54.78, and a kilo sold around US$54,783.26.
Experts are predicting an even higher value for it in the coming months and that should bode well for the country since we are the second largest gold producer on the continent. The country can take advantage of this favourable market situation and ramp up production to maximize its returns.
While oil prices have slumped considerably, the country’s mining sector can be a buffer in times like these when stock markets react negatively to the COVID-19 outbreak.