Tuesday, 28th March 2006 (4394 views)

The price of gold broke through the AU$800 per ounce mark for the first time today, sending stocks in Australian mining companies soaring.

Newcrest Mining, Australia's biggest producer, experienced a seven per cent rise in share price, Oxiana's shares gained three per cent and those of Dominion Mining, a smaller local company, jumped up by nearly eight per cent.

Analysts attributed these substantial rises in the strength of the precious metal and related company shares to the relatively weak Australian dollar.

"The Aussie gold price has risen far more than production costs have, so profit margins are increasing," said Sandra Close, the managing director of mining consultant firm Surbiton Associates.

She also partly attributed recent gains to the record levels in the price of copper, which is a common derivative of mining gold.

"The value of the copper by-product is counted as a credit against the cost of producing gold so in accounting terms, with high copper prices, it is possible to produce gold at a very low or even negative cost," she said.

Last month the gold price overtook the previous record of AU$766 per ounce, which was set in January 1980.

 

« Back to Gold News stories

 

The news feeds on this site are independently provided by Adfero Limited © and do not represent the views or opinions of the World Gold Council.