A predicted “mini gold rush” in Western Australia, combined with skyrocketing iron ore prices, is renewing optimism about the state’s long-subdued economy.
The price of gold in Australian dollars has reached a record high, hitting $2,000 an ounce for the first time last week. The precious metal also broke through $US1,400 ($2,014) an ounce for the first time in almost six years.
“Psychologically it’s a very important level to have broken through,” Katana Asset Management portfolio manager Romano Sala Tenna said. He said the price increase was fuelled by demand from central banks, which were buying gold as a store of value, as countries such as the US and China diluted their currencies.
“I think we’re going to see a mini gold rush over coming years if the gold price holds these levels,” he said. “We’ve got very cashed-up gold miners in Australia, some of the most cashed-up in the world, and they need to get organic growth.
It was critical for gold miners to look at new projects and reinvigorating past projects, he said. Western Australia is the nation’s biggest gold producer, accounting for almost 70 per cent of total gold production. The industry is also benefitting from a fall in production costs, according to Acil Allen Consulting executive director John Nicolaou.
For the rest of this article: https://www.abc.net.au/news/2019-06-24/soaring-iron-ore-gold-prices-boost-wa-economy/11240808