A week ago we gave you the thinking of the World Gold Council on the outlook for gold in the coming year.
This week, it’s the turn of ABARE, the federal government’s resource forecaster.
It sees production and prices rising this year into 2011, before a price tumble to under $US900 an ounce in 2012.
Export income will fall this financial year, before rising in 2011.
The extent of the rise and fall will depend on the amount of non-monetary gold imported for processing and then re-exported.
Looking at global production, ABARE said it saw 2009 up 6% to 2553 tonnes, the highest level for six years.
Australian annual gold mine production is projected to be between 266 tonnes and 276 tonnes until the end of the outlook period in 2015.
Newmont’s Boddington mine is a major reason for the higher production, but it will be supported by a host of smaller companies and their projects.
The biggest influence on gold prices will be the huge deficits and debts in major economies like the US and Europe, and the growth path of the global economy in the next couple of years.
ABARE says Australian production may rise 11% in the June 30 financial year, 10% in the 2011 financial year and a further 2% in 2012.
“The start up of the Newmont’s $3 billion Boddington redevelopment is expected to be the largest contributor to this growth,” the bureau said this week in its March commodity outlook.
"Australian gold mine production is forecast to increase by 11 per cent to 242 tonnes in 2009-10. Supporting this growth is the start-up of Newmont’s $3 billion Boddington development in Western Australia, which is expected to produce around 31 tonnes a year over the first five years of its operation.
"Also contributing to this rise is the increase to full capacity of several medium-sized projects including Apex Minerals’ Wiluna redevelopment, Avoca’s Higginsville project (each 6 tonnes a year) and OzMinerals’ Prominent Hill mine (2 to 3 tonnes a year).
"In 2010-11, Australian gold production is forecast to increase by 10 per cent to 267 tonnes.
"The ramp-up of the Boddington redevelopment is expected to be the largest contributor to this growth; however, a number of new projects are also expected to begin production.
"These include the recommencement, under new owners, of Crocodile Gold’s Northern Territory tenements (6 tonnes a year) and Swan Gold Mining’s Mt Ida and Carnegie projects (3 tonnes a year). Also contributing to growth are Citigold’s Charters Tower’s operation (increasing to 9 tonnes a year by 2013), St Barbara’s Gwalia Deeps (increasing to 6 tonnes a year by 2012), Saracen Minerals’ South Laverton operations (3 to 4 tonnes a year) and Newcrest’s Ridgeway Deeps project (6 tonnes a year).
"In 2010-11, higher Australian gold mine production is projected to lead to export volumes rising by 19 per cent to 449 tonnes.
"Relatively stable Australian gold mine production and the expectation of continued refining of overseas sourced gold is projected to result in the quantity of Australian gold exports remaining at between 460 and 475 tonnes a year for the remainder of the outlook period." (2014-2015).
ABARE said it saw the value of Australian gold exports falling 9% to $14.7 billion in 2009-10. In 2010-11, stronger export volumes are projected to result in the value of Australian gold exports rising to $16.7 billion.
"In 2011-12 and 2012-13, the value of Australia’s gold exports (in 2009-10 dollars) is projected to fall to between $14 billion and $15 billion as the gold price falls.
"However, by 2014-15, the real value of Australia’s exports is projected to return to around $16 billion, which reflects a strengthening of export volumes and prices."
ABARE said it could see a further rise in Australian output in the period from 2013 onwards.
"There are a number of mines scheduled to be in operation in the second half of the outlook period. These include Newcrest’s Cadia East underground project (producing 22 tonnes a year by 2013) and Anglogold Ashanti/ Independence Group’s Tropicana Joint Venture project (10 to 13 tonnes from 2013).
"Offsetting the increased production from these new mines is lower production from existing mines which are close to exhausting gold reserves," ABARE said.
In 2010 the gold price is forecast to rise by 11% to average $US1080 an ounce, ABARE forecast.
"Uncertainty surrounding the pace of global economic recovery is expected to sustain the investment appeal of gold and continued weakness in the US dollar in the short term is expected to increase gold demand.
"Also influencing gold demand in 2010 is the continuation of expansionary monetary and fiscal policy in the United States, which is likely to place downward pressure on the global demand for US Treasury bonds in favour of other low-risk assets such as gold.
"In 2011, the gold price is forecast to fall by 11 per cent to US$960 an ounce.
"The assumption of an ongoing recovery in world economic growth is forecast to lead to a reduction in speculative investment demand for gold.
"Similarly, as the appetite for higher risk assets such as shares and property increases, investment demand for retail gold, such as gold bars and coins, is forecast to moderate.
"As world economic growth returns to levels which are more consistent with its longer term potential, further falls in investment demand in 2012 are projected to lead to an 11 per cent fall in the price, in real terms, to
