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Australian gold output at 17-year high

Monday, February 27, 2017

Australia produced its highest volume of gold for 17 years during 2016, according to a new survey by mining consultants Surbiton Associates.

Output reached 298 tonnes of the precious metal last year, as companies were spurred on by the high prices the commodity was making in the markets. Good foreign exchange rates also helped the increase, Surbiton said.

Director, Sandra Close, told Reuters: “Overall, the Australian dollar gold price has continued to be attractive, thanks to the combination of the US dollar gold price and favourable exchange rates.

“This has encouraged the redevelopment of previously mined areas and the refurbishment of mothballed plants, thereby pushing Australian gold output higher.”

The figure was the highest since 1999. Australia’s record production year was in 1997, when the country’s output stood at 314 tonnes of gold. However, there are concerns about the first quarter’s output for 2017 because of heavy rains in the main gold mining area of Western Australia, which has resulted in lower production.

Meanwhile, the gold price hit a four-month high last week as more investors sought a safe haven for their money. It reached a high of £1,010.25 per troy ounce at the market’s close on Friday (February 24).

It’s the highest price since Donald Trump won the US election and points to higher levels of anxiety about the economy, according to analysts.

Fawad Razaqzada, market analyst at Forex.com, told The Express: “The metal’s remarkable performance may suggest that investors are positioning themselves up for a major risk-off event – such as a collapse in the US stock markets.

"With the major US indices rising almost parabolically, it is just a matter of time before the inevitable happens."

Shares have been trading at high volumes amid Mr Trump’s promises of a new tax policy. He is due to unveil the details of the plans tomorrow (February 28).

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