By Christopher Galbraith | 07 March 2017
The past year was one of guarded optimism for the gold market, with a strong first half tempered by a volatile last few months. Despite such turmoil, preliminary production results for the December quarter supported relatively stable quarterly mine supply year on year (up 1%); for the full year, we estimate that 2016 gold production was around 96 Moz, slightly above the 95 Moz produced in 2015.
Many major gold producers started to reap the rewards of their persistent efforts to reshape their companies over the past few years. Although some sacrificed production in lieu of margins, most CEOs would view 2016 as a year of positive momentum, given their share performance. For many, 2017 and 2018 will represent a period of strategic shift as they work to improve their medium- and long-term supply pipelines.
The producers' pipeline efforts will likely benefit from renewed interest in the exploration sector as 2016 progressed. Although annual exploration budgets for gold fell for 2016, the levels of activity on the ground picked up dramatically in the second half of the year, spurred on by equity market support that started in March. S&P Global Market Intelligence expects exploration budgets and activity to stabilize in 2017, after turning a corner last year.
|
