Gold Exploration Spending Falls

March 1999

Precious Metals:Data & Statistics

Gold Exploration Spending Falls

Faced with rising costs and lower market prices, gold producers based in the United States reduced their exploration budgets 28% to $417 million last year, according to The Gold Institute, an international association of suppliers of gold and gold products. They cut expenses and started to concentrate on investments at their lowest-cost properties, says the institute.

The biggest reductions – by dollar value – were in Latin America, down $93 million, and the United States, down $57 million (see table at right for details). The figures are based on preliminary year-end figures as reported in the institute's "Annual Exploration Survey of Gold Producers."

For retailers, tighter supplies resulting from less exploration could shore up gold prices in the short-term. But if the mining companies continue to expand their exploration efforts in lower-cost countries and get into a competitive race with each other, the resulting overabundance of gold would have a downward pressure on prices.

Copyright © 1999 by Bond Communications.


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