Yesterday saw US gold futures hold at $1908.20 per ounce on the Comex, a gain of almost 7.7%. July 2020 saw the biggest gains for bullion, in the middle of a pandemic that saw safe-haven assets like gold and USD climb steadily. Now, growing inflationary pressures may be providing some measure of fuel to gold’s fire, but bullion’s appeal is still multivariable.
As investors wait for key US jobs data this week, they should find a little more clarity on the progress and strength of the economic recovery. A disappointing report for April showing 266,000 jobs created versus just over 1,000,000 expected was a not-insignificant pump on the brakes for optimists. Gold saw it’s allure increase overnight and regain some of the momentum it had in 2020. A falling US dollar, currently in its ninth consecutive week of a months-long downswing, has added to some of gold’s positive shine.
Good Times for Gold Miners
Of course, gold miners are keeping up with production, as the value of their product continues to rise. The first quarter of 2021 saw a small drop YoY in Q1 production for most miners, as the pandemic only started hitting hard shortly after. The results make it clear that the first quarter of 2021 looks quite similar to the first quarter of last year, giving production the appearance of being “back to normal”.
Top 3 Gold Producers Q1 2020
Newmont (NYSE:NEM) took the top spot with production coming in close YoY at 1.45 Moz, a 2% decrease from the prior year’s quarter. The sale of its Red Lake property, lower leach pad production and the ramp down of the Yanacocha mill, lower mill throughput at Nevada Gold mines, and more contributed to the slight hit in production. Still, most sites are returning operations to full capacity while managing ongoing pandemic-related impacts lingering from the past year.
Second place goes to Barrick Gold (NYSE:GOLD). The Canadian producer put out 1.1 Moz in Q1 2021, a bigger decline than Newmont’s (NYSE:NEM) YoY at 12% (1.25 Moz Q1 2020). With reopenings continuing, the second half of the year is likely to be stronger than the first, as the company has plans for mine sequencing at Nevada Gold Mines, a ramp-up of underground mining at Bulyanhulu and higher anticipated grades at Lumwana in Zambia.
3. Polyus (OTC:OPYGY)
Bronze goes to Russia gold mining company Polyus (OTC:OPYGY). Total output hit 592 thousand ounces in Q1 2021, almost unchanged YoY from 595 thousand ounces in 2020. As the company has just completed its mill capacity expansion project, the rest of 2021 is also likely to be brighter than the beginning for this gold miner.