Positive momentum continues for Canadian miners
The positive start to 2019 for miners continued in the second quarter of the year with advisory firm EY’s Canadian Mining Eye index moving up three percentage points from the first quarter, supported by stronger gold prices.
The price of gold increased by 9% in the second quarter, after a 1% gain in the previous quarter — driven by the possibility of US Federal Reserve rate cuts toward the end of the year.
The second quarter wrapped up with spot gold at $1 414/oz. Prices increased 8% in June alone, reaching new all-time highs in Canadian dollars and Australian dollars. Prices remain 25% below their peak in US dollars in August 2011 and 20% below their Chinese Yuan peak reached in the same month.
Base metals price momentum stalled with nickel, copper and zinc prices declining 2%, 8% and 14%, respectively, after a positive first quarter. However, EY says that copper prices are forecast to remain strong in 2019, underpinned by a supply deficit and growing demand for copper in renewable energy and electric vehicles. Citing the International Copper Study Group, EY reports that the copper deficit is forecast at 189 000 t in 2019 and 250 000 t in 2020.