Stronger greenback helps boost Australian gold – Reuters

SYDNEY Aug 30 A stronger U.S. dollar is helping
drive Australian gold production and buffeting local prospectors
from the effects of a global sell-off in bullion, according to a
sector survey released on Sunday.

Production of the precious metal in Australia rose by 4
percent in the second quarter to 72 tonnes versus the previous
quarter, second only to China, mining consultants Surbiton
Associates Pty Ltd said in its latest tally of Australia’s gold
mining industry.

A stronger greenback is playing into the hands of Australian
prospectors, with the bullion price in Australian dollar terms
relatively stable since the start of 2015, according
to Surbiton’s director, Sandra Close.

“Despite lower gold prices in U.S. dollar terms, the
depreciation of the Australian dollar is proving a blessing for
Australian gold producers,” Close said.

“Although the gold price averaged U.S.$1,192 per
ounce in the June quarter, the Australian dollar gold price
averaged A$1,532 per ounce,” she said.

Australia’s gold output over the 12 months to June 30 rose 1
percent to 285 tonnes, which at today’s prices is worth about
A$14 billion ($10.05 billion).

China is estimated to have produced around 450 tonnes in
calendar 2014.

A looming U.S. rate hike has long dimmed the appeal of
non-interest bearing assets such as precious metals, and gold on
Friday posted its biggest weekly drop in five weeks after robust
U.S. economic data suggested stronger growth.

But in Australia, gold still shines.

“We feel we are in terrific shape,” said Jake Klein,
executive chairman of Evolution Mining, which has spent
close to A$800 million ($574 million) buying mines in Australia
this year and reported an 112 percent rise in underlying profit
in fiscal 2015.

“The balance sheet is strong and the gold price is A$100 an
ounce higher than we achieved last year,” Klein said.
($1 = 1.3935 Australian dollars)

(Reporting by James Regan in; Australia, Editing by Franklin
Paul in New York)