A study of the largest gold mining companies reveals falls in the gold production in the first quarter of the year, compared to the figures obtained in the fourth quarter of 2019.
According to reports, gold production in the first quarter of 2020 totalled 5,859 million ounces (182.2 tons). This was 15% less than the 6,834 million (212.5 Tm) for the fourth quarter of 2019. The figure is approximately one million ounces (31.1 Tm) lower than that of the previous quarter.
The study also reveals that nine of the ten largest gold miners in the world registered falls in their quarterly production. The exception is the South African miner AngloGold Ashanti, which did not publish its total production figure for the fourth quarter of 2019.
One of the reasons for this drop in production is the adoption of restrictive measures in the mining industry. Production halted in the countries where the mines are located (especially Mexico, South Africa and the Canadian province of Quebec), due to the Covid-19 epidemic.
However, the study also points to other factors to explain the reduction in production. One of these factors is seasonal changes and the modification of the plans of some mining companies.
Canadian Kirkland Lake Gold is the only mining company that recorded an increase in production in the period.
The report also warns that the situation is expected to worsen in the second quarter of the year. Randy Smallwood, the CEO of Wheaton Precious Metals, said that the second quarter would be the worst. He explained that this would be especially relevant in terms of financial impact and impact on capital flows. Most of the activity closings and suspensions took place between the end of March and the beginning of April.
The Federal Reserve has issued a record amount of new currency in circulation in the past two months. While the financial media has focused on the massive amount of new digital money in print, the Fed also introduced more new dollar bills to the market from March to May than it did throughout the past year.
According to the Federal Reserve, the currency in circulation increased a staggering $122 billion from March to May.
The US analyst notes that the annual increase in US currency in circulation ranges from $80 to $100 billion per year. However, the Federal Reserve increased the total money in circulation by $122 billion from March to May.
That’s a lot of new RF tickets that will be issued in just 1/6 of the year. So how much gold and silver production could this new currency in the circulation buy?
The world produces around 800 million ounces of silver and 111 million ounces of gold. This is according to data from the World Silver Survey 2020 and the World Gold Council respectively.
Thus, the $122 billion of new US currency in circulation would equal the value of nine years of the global supply of silver mines and nine months of gold production. This only includes the rise of Federal Reserve bills.
Analysts think we are just beginning to see the next explosion in gold and silver prices.
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