Thanks to lower costs, better management and more favourable currency markets, Canadian gold companies are better positioned to benefit from record high bullion prices than a decade ago, the last time the commodity was in an extended bull run.
Last week, the price of gold hit an all-time high, surging far past the previous record of US$1,920 an ounce in 2011. Gold has been one of the world’s best-performing asset classes this year because of unprecedented COVID-19-induced stock market volatility.
Historically, investors have sought refuge in the metal during times of great uncertainty. On Friday, gold futures closed at US$2,046 an ounce.
With a white hot commodity price in place, the next few months are expected to be among the most profitable periods ever for Canadian gold producers.
“There’s a dramatic amount of cash that’s going to be generated in this industry,” said Sean Boyd, chief executive officer of Agnico Eagle Mines Ltd., Canada’s second-biggest gold company by stock market value. “Some of the biggest cash amounts in decades.”
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