Georgetown: After recording a significant drop in gold prices on the world market for the past year, the Guyana Gold Board (GGB) has advised that the gold market is currently at an all-time high since the beginning of February 2015.
While 2015 began with the price of gold quoted by the London Fix at US$1184.25, the market prices initially fluctuated within a US$1,140 to US$1190 band before showing increased volatility and pushing upwards.
According to the GGB, gold prices ended the US day session modestly higher and hit a two-week high on Monday.
“Solid losses in the US dollar index on this day worked in favour of the precious metals bulls. The gold and silver market bulls have gained some upside technical momentum to suggest near-term lows are in place. The key “outside markets” on Monday found the US dollar index sharply lower and crude oil prices near steady. The US dollar index posted a bearish weekly low close last Friday and saw higher volatility at higher price levels last week – both early technical clues of a topping process in the index. The weaker greenback is a bullish underlying factor for most of the raw commodity sector,” the board said in a statement.
Meanwhile, the GCB is urging all producers and other holders of gold to sell and declare the gold in their possession.
The agency noted that in order for the declaration to be encouraged, the Government of Guyana has approved duty free waivers for the importation of various required vehicles for gold producers.
“The GGB wishes to remind producers and traders of their legal obligation to declare their production and transactions in accordance with the Guyana Gold Board Act…that waiver is depended on the declaration of gold by producers. The Guyana Gold Board as part of the Natural Resources and Environment Sector is aware of ongoing efforts to engage the mining community in looking at support as well as addressing any challenges ahead,” it said.
It was only last week that President of the Guyana Gold and Diamond Miners Association (GGDMA), Patrick Harding expressed optimism that the gold prices would once again increase noting that there were many who were still seeing the industry as a viable one despite the many challenges.
Total gold declaration at December 20, 2014 decreased by 22.61 per cent when compared to 2013, while gold purchased by the Guyana Gold Board had decreased by 41.24 per cent for the same period. In 2013, the gold industry declared a total of 481,087 ounces of gold which represented a 9.7 per cent increase over the previous year’s figure. Meanwhile, according to Harding, while 2014 generally saw a low declaration; when the first two months of 2014 were compared to January and February of 2015, declarations were lower this year.
During a recent meeting with Natural Resources Minister, Robert Persaud and stakeholders, the measures needed to ensure the sector’s viability in 2015 and beyond were discussed and announcements made.
At that meeting, a 10 per cent reduction in tax for diesel fuel imported for the sector which was requested by the miners was approved with the necessary measures were put in place with relevant agencies such as the Guyana Revenue Authority (GRA). The cost of fuel had often been cited as the largest expenditure for miners, often around 40 per cent of production cost.
A licence was also granted to GGDMA to import fuel for use within the sector. There was also a proposal to examine the granting of duty-free concessions to miners whose operations exceeded a certain level of production, and this too has been approved.
With these concessions now being made available to the miners, it is anticipated that volatile gold and diamond prices would improve as this year’s production efforts begin.
Gold exports for the 2013 fiscal year amounted to US$648.5 million, a 9.5 per cent decline compared to 2012. The sharp decline was linked to the average price of US$1344 per ounce compared to US$1575 in 2012, negating the six per cent increase in export volume, which amounted to 482,527 ounces.
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