Blog Post

July 21, 2022

Why is the gold price dropping?

Last week gold was in its worst week in more than a year.

Usually, gold is a safe-haven choice in times of crisis and instability, however last week it dropped to its lowest price.

Why is the gold price dropping?

What caused the drop in gold price is the rise of the US interest rates and the strengthening of the dollar, pushing the gold price below 1800 dollars a troy ounce last week.

Gold traded low as 1733 dollars an ounce on Friday, which is down 16% from its peak on the 8th of March when it was 2069 dollars an ounce at the early stage of the Russo-Ukrainian war.

Global investors are losing their appetite for precious metals. In June and May, we have seen investors withdraw from gold exchange traded funds making the gold market unstable and lowering its price.

Although currently the price of gold has dropped and investors are buying less because central banks are tightening their monetary policies and increasing interest rates, James Steel – Chief precious metals analyst, says many investors will buy gold. He predicts that many investors which want to diversify their portfolios are going to invest in gold and precious metals, so we should see a rise in price in the medium term.

Another reason for investors to be less keen on investing in gold is India’s announcement to increase its import duty on gold by 5%. Which is likely to hit consumers’ demand in the world’s jewelry market.

Although the gold price had its drop, we can’t undermine the historical importance of investments in gold in uncertain times.

How can gold mining companies adapt to higher expenses and a lower gold price?

Barrick Gold Crop adapted to these volatilities by increasing its stockpiles of cyanide, explosives and other vital raw materials.

They say the Russo-Ukrainian war affects the global price of these vital materials and they have to prepare for higher operational costs. Russia is the world’s main exporter of gas and the high gas costs have severely affected Europe’s production of cyanide, a substance used to extract gold from ore.

Draslovka, a Czech cyanide maker suspended the production of cyanide in Europe as it became uneconomic The price of raw material and energy to make a finished product has risen by 270% during the last year.

Gold mining companies should think about how to keep their operations profitable in these unstable times, and technology can have a significant impact on their operations.

How can CyanoGuard’s technology help mining sites save money?

One of the highest operational costs in gold mining is cyanide and detox reagent cost.

Our solution can help gold mines optimize their cyanide usage, which can lead to lower usage of cyanide or optimization which can lead to higher gold yield. Our technology can also help your mining site digitize your cyanide monitoring.

How does our technology work?

Our cyanide monitoring system doesn’t require user input, calibration, manual calculation or preparation of reagents. The device can identify peaks in the measurement and notify the operator to repeat the measurement. Unlike traditional methods such as silver nitrate titration, our solution is less prone to interferences from other metals and compounds like copper, zinc, iron, nickel, silver, thiocyanate, carbonates or samples with pH below 12.

Our device analyses the color change in the cartridge and uses an AI-based algorithm to determine the concentration of cyanide.

By using our technology, the operators can timely react to any changes. Your mine can harvest its benefits by reducing cyanide consumption by 15%, increasing gold production by 2%, reducing detox reagent costs by up to 20%.

In these times of uncertainty, market volatility, inflation, lower gold prices, and higher pressure to increase your ESG score, the mines must think about how to improve their operations and gain higher profits at each stage of gold production.

By improving and modernizing its operations mines can reduce its operating costs.

In case you have any questions about how CyanoGuard can help improve your operations feel free to contact our mining solutions team.

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