Gold declarations down 22%

Gold declarations are down 22.61% compared with last year’s, the Guyana Gold Board (GGB) said yesterday, attributing the falling off to the slump in the world market price for the precious commodity.
A statement from the GGB yesterday said it had recorded lower levels of gold declaration for the various periods of 2014 compared to 2013. The combined statistics of all mining operations and gold dealers’ data for the year indicated that the expected output for 2014 will not be met as originally calculated at the start of the year.
“…The year-on-year decline may suggest a weak market, but such comparisons are still heavily influenced by the events of last year,” the GGB stated, adding that longer term analysis shows a market in good health.

It stated that the year-to-date volumes continue to extend the broad uptrend from the drop in 2009. However, the lack of a clear price signal, as well as continuing to digest last year’s demand surge, caused investors to hold back from buying gold. “The ongoing economic and geopolitical instability encouraged central banks to continue to seek the protection and diversification of gold. Thus, the broad themes surrounding gold supply during the first half of the year continued to play out in the second half,” the GGB suggested.
It pointed out that the total declaration as at December 20, 2014 has decreased by 22.61% when compared to 2013, whilst gold purchased by the GGB fell to 41.24% for the comparative periods.
However, dealers’ quantity of gold exported increased by 10.16%.
GGB quantity of gold exported, on the other hand, dropped by 40.26%, causing the overall quantity of gold exported for the two periods to decrease by 22.73%. Moreover, the value of gold exported by dealers increased by 10.86%, while the revenue garnered by the GGB decreased by 43.48% during the comparative periods.
The total revenue for the two comparative time periods, thus, fell by 23.45%.
“In 2013 it was forecasted that gold might fall to $1,050 an ounce before this downturn is over. The yellow metal duly fell by a quarter in 2013, when compared to its highest level in 2011 and has made little headway in 2014, despite lots of geopolitical uncertainty. It stood at $1,198 an ounce on Friday evening,” the GGB said in the statement, adding: “The sentiment is bearish and miners are being forced to curtail production or shelve investment plans.”
The GGB also stated that gold stocks suffered miserably for the last few years and have become a laughingstock even among contrarians. “However, this despised sector’s seemingly endless downward spiral has left gold stocks vastly undervalued relative to gold, which drives their profits,” GGB stated, noting that the disconnect between gold-stock price levels and gold cannot last and it “looked ready to end,” making 2015 the year gold stocks shine again.

It stated that gold miners’ profits are almost dependent on the price of gold, since mining costs are largely determined by the particular deposit being mined and are largely fixed when any mine is designed and constructed. And so, the higher it is, the large their margins grow since their costs generally do not change.
The GGB further stated it was working with the Ministry of Natural Resources and the Environment, the Guyana Geology and Mines Commission and all stakeholders of the mining industry, particularly the Guyana Gold and Dia-mond Miners Association, to ensure the sustainability of the sector.
It added that some of the interventions by the government and its agencies included duty free concessions for All-Terrain Vehicles, excavators, bulldozers and other machinery, double-cab pickups, spares and equipment. Miners also have access to fuel licences, access to foreign currency, work permits and availability of new areas for mining.