Gold deliveries sustain increases amid global price rally

BULAWAYO – Gold deliveries sustained increases in September, albeit at a marginal rate of 0.41%. According to data from Fidelity Gold, monthly gold purchases were 3,143.19 kg, compared to 3,400.34 kg in August. When compared to the same period last year, purchases were at 3,130.71 kg, reflecting an increase of 9.05%.

Despite the increase, the country continues to lag behind set targets and is struggling to fully capitalize on the rally in gold prices due to deep-rooted structural challenges in both the ASM and primary producers sectors.

Small-scale miners remained consistent for the sixth straight month as the sector continues to chase an elusive 3 000 kg monthly target. Deliveries by the sector were 1.35% higher to 2,404.98 kg from 2,373.05 kg. Compared to last year, deliveries were 10.85% higher, at 2,169.58 kg.

Recently, Fidelity announced that it has developed a set of measures to establish itself as the exclusive preferred buyer of gold in Zimbabwe. These measures include spot payments to artisanal and small-scale miners upon delivery of gold, and Fidelity has no restrictions on the quantity of gold it purchases from the sector, starting at as little as one gramme.

Fidelity said it operates 17 gold buying centers across all mining provinces and will open three more in Mberengwa, Ngundu, and Mt. Darwin by October 31, 2024. In addition, Fidelity has gold-buying agents operating in areas where there are no gold-buying centres.

The Mutapa subsidiary also said that it is entering into joint ventures with investors for the purposes of constructing 13 gold service centres in strategic gold-rich areas.

Large-scale miners saw a 1.76% drop to 1,009.21 kg from 1,027.29 kg amid rising operational costs and a lack of exploration capital. Power outages and inconsistent electricity supply have also disrupted operations, further hampering production. However, the rising gold prices have enabled primary producers to maintain production levels by sustaining marginal deposits for longer in certain instances.

Cumulative deliveries are now at 24,093.91 kg against an annual target of 40,000 kg. The third quarter to September is the most buoyant to date, at 10,309.62 kg against 7,739.42 kg in Q2 and 6,044.87 kg in Q1.

In September, the price of gold hit another all-time high after breaking through the US$2,600 per ounce barrier.

So far in 2024, the price of gold has reached several new highs. In March, it soared to US$2,160 per troy ounce, an 8% increase from the record high of $2,135 in December 2023. Gold’s price continued to increase from there, and it surpassed that record just one month later. The price of gold then hit new highs in May, August, and again in mid-September.

Gold prices have appreciated an average of 8.5% in the six months following a rate cut of 50 basis points, with most analysts saying this pattern fuels forecasts of US$2,700 by month’s end. -finx