Gold production is shrinking and gold price is expected to rebound

According to Bloomberg News, the World Gold Council (WGC) stated that as producers cut spending and shut down some high-cost businesses, gold production will remain flat or even fall this year, and gold prices will rebound. "This year's global mine production may be flat or even falling," said Marcus Grubb, managing director of investment research at the World Gold Council, in an interview in Kalgoorlie, Western Australia. "This will bring the market back to balance. We believe that, fundamentally, this means that we are now closer to the bottom of the price than to the top."

The price of gold has fallen by 22% so far this year. The 12-year-old bull market may end here because the US central bank is expected to reduce the stimulus and investors will no longer use gold as a means of hedging. In the past two months, producers from Canada to New Zealand have announced asset writedowns of at least $21 billion, and they are currently cutting spending, cutting staff, and shutting down the most expensive businesses. Driven by jewellery and coin demand, gold prices have rebounded by 9.6% from the 34-month low of $1,180.50 set on June 28. At 08:33 local time in Mumbai, spot gold prices fell 0.8% to US$1,293.27 per ounce.

Barrick Gold Corp, the world's largest gold producer, may take measures to sell, close or cut production for 12 mines from Peru to Papua New Guinea that have higher production costs than $1,000 per ounce. CEO Jamie Sokalsky said in an interview on August 1 that the 12 mines under evaluation accounted for about 25% of the company’s production.

"The supply side will be readjusted because we know that mining companies now need to adapt to changes in the situation, especially in Australia, as well as in South Africa," Grubb said. According to Grubb, according to the prediction of the World Gold Council, China will surpass India to become the world's largest gold consumer this year.