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the level of interest rates and inflation expectations. During 2012 the price of gold fluctuated between a low
of $1,527 per ounce in May to a high of $1,796 per ounce in October. The average price for the year based
on the London Bullion Market Association PM Fix was $1,669 per ounce, a $97 increase over the 2011
average price of $1,572 per ounce. The major influences on the gold price during 2012 included strong
investment/bar hoarding demand and continued official sector purchases, offset by weaker jewelry and
fabrication demand. In addition, the gold price was also affected by continuing uncertainty relating to the
global economy, particularly in regards to European sovereign debt, the slowing of the Chinese economy,
and the United States Federal Reserve’s quantitative easing program.
Source: London Bullion Marketing Association London PM Fix, Bloomberg, GFMS, Company records MDA8 KINROSS GOLD 2012 ANNUAL REPORT Gold Supply and Demand Fundamentals Source: GFMS Gold Survey 2012 Total gold supply decreased a modest 0.7% in 2012 relative to 2011, with global gold mine production
increasing 0.2% and recycled gold decreasing 1.6%. Mine production and recycled gold have been the
dominant sources of gold supply, and in 2012 they represented approximately 63% and 37% of total supply,
Overall, the limited supply of gold to the market has been a positive influence on the price of gold, as the
growth in both mine production and recycled gold has levelled off. For the third year in a row, central banks
have not been a source of supply to the market, but have rather been net buyers, as noted below. KINROSS GOLD 2012 ANNUAL REPORT MDA9 Source: GFMS 2012 Gold Survey Overall demand marginally decreased by approximately 0.7% in 2012 relative to 2011. With gold prices
increasing, particularly in many of the traditional gold market currencies such as the Indian rupee,
fabrication demand is estimated to have decreased by 5.3% in 2012 relative to 2011. The decrease largely
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This document was uploaded on 03/30/2014.
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