Aussie trumps US price for gold – The West Australian

Aussie trumps US price for gold
The Australian dollar gold price should matter more to local producers.

A gold industry consultant has given Australian investors a rap on the knuckles for focusing too much on the precious metal’s US dollar value.

Surbiton Associates director Sandra Close said the depreciation of the Australian dollar was a blessing for local producers when US dollar prices fell.

She said though the gold price averaged $US1192 an ounce in the June quarter, in Australian dollars it averaged $1532/oz.

“I often wonder why local investors place so much importance on the US dollar gold price,” Dr Close said.

“It is the Australian dollar gold price that matters to local producers as their costs are mostly in Australian dollars.

“Focus on the margin. I find it quite bizarre to see the share prices of Australian-domiciled gold producers fall in response to a decline in the US dollar gold price when, due to a change in the exchange rate, the Australian dollar gold price has actually risen.”

Surbiton said gold production increased by 4 per cent in the June quarter to 72 tonnes.

Output was up one per cent for the past financial year to 285t — worth more than $14 billion at the current price.

Dr Close said the June-quarter increase was mostly because of more ore being treated by some of the primary gold producers.

Kalgoorlie-Boulder’s Super Pit, owned by Newmont Mining and Barrick Gold, lifted production by 44,000oz while Newmont’s Boddington and Tanami operations in WA each prod-uced 17,000oz more. Production fell 20,000oz at St Barbara’s Gwalia mine and 9500oz at Gold Fields’ St Ives operation, both in WA.

The Boddington mine had the nation’s biggest output for the year at 739,000oz, followed by the Super Pit with 606,000oz.


The West Australian