Global gold output to dip this year ahead of record 2021: Metals Focus

Global production from gold mines will reach a record high of 3,664 tonnes in 2021, according to estimates by consultancy Metals Focus.

This total output figure would resemble an 8.8% increase on the group’s prediction of 3,368 tonnes of gold produced this year, which would be a 4.6% decline on 2019 and the lowest in five years.

Demand for gold will also fall 25% this year to about 3,000 tonnes before recovering 17% in 2021, Metals Focus head of mine supply Adam Webb said in a webinar.

Gold production this year has been dented by mine closures to prevent the spread of COVID-19. However, the pandemic also triggered a wave of ‘safe haven’ investment in gold, which pushed the price above US$2,000 per ounce.

Gold is up 26% year-to-date and has outperformed the S&P 500 and TSX Composite Index, and Metals Focus said gold prices are likely to average more than $2,000 per ounce in 2021.

The consultancy added that earnings per ounce of mining companies in the second quarter of 2020 were on average $739 higher than their costs, up from about $350 in mid-2019.

Gold production by artisanal and small-scale (ASM) miners using basic technology will decline slightly this year before increasing 13% to over 600 tonnes in 2021 – the most on record.