Gold Prices Rise Amid Economic Concerns and Shift in Mining Laws

Strategic Insights -

As the global economy continues to grapple with uncertainties, gold prices are expected to rise to $1,400 over the next two years, according to Aurizon Mines Ltd. This prediction comes as gold miners such as AngloGold Ashanti Ltd. report increased production and earnings, despite booking a loss for the period due to the closure of gold hedges. Meanwhile, changes in mining laws in Venezuela and Peru have created a stir in the industry, with companies like Compania de Minas Buenaventura SAA exploring opportunities for underground mining.

Key Takeaways:

  • AngloGold Ashanti Ltd. reported a 4% increase in gold output and more than doubled earnings from gold sales in the second quarter, but booked a loss due to the closure of gold hedges.
  • Aurizon Mines Ltd. predicted gold prices will rise to $1,400 over the next two years due to economic concerns.
  • Compania de Minas Buenaventura SAA CEO mentioned the possibility of developing underground veins for precious metals and copper mining at the Yanacocha gold mine in Peru.
  • Venezuela softened its law that required gold miners to sell 70% of their product domestically and allowed export of only 30%.
  • Eurex will launch euro-denominated gold futures and options on September 28.
  • Royal Gold Inc.'s fiscal fourth-quarter profit rose 48%, but missed analysts' estimates.
  • Statistics South Africa reported a 4.9% decline in South African mining production in June.

Statistics:

  • AngloGold Ashanti Ltd. reported a 4% increase in gold output in the second quarter.
  • Aurizon Mines Ltd. predicted gold prices will rise to $1,400 over the next two years.
  • Compania de Minas Buenaventura SAA CEO mentioned the possibility of developing underground veins for precious metals.
  • Venezuela softened its law that required gold miners to sell 70% of their product domestically.
  • Eurex will launch euro-denominated gold futures and options on September 28.
  • Royal Gold Inc.'s fiscal fourth-quarter profit rose 48% to a profit of $38.2 million.
  • Statistics South Africa reported a 4.9% decline in South African mining production in June.

Sources:

  • Dow Jones Commodities News via Comtex
  • Comtex
  • Dow Jones (08-12-10 1610ET)
  • Copyright (c) 2010 Dow Jones & Company, Inc.