AME forecasts the September quarter price will be US$1,800/oz. This is a decrease of 4% from the June quarter. Lower prices have been driven by a drop in demand from both ETF investments and consumer spending in China. Tightening monetary policy and a strong US dollar have also created headwind for the gold price.
AME forecasts a total year average gold price of US$1,843/oz in 2022,
down significantly from our previous forecast based on the soft demand and
inimical monetary policy. Gold price will grow to US$1,950/oz by 2024. This
will come as conditions normalise and wealth increases, prompting greater
consumer demand from China and India.
AME’s forecast Asia Gold Spot price for the September quarter is
US$1,807/oz, also down 4% from the June quarter.
Following the extremely strong March
quarter for gold investment which saw global holdings reach near-record levels,
ETF flows have reversed in the June quarter. Outflows of -39t were recorded.
This reversal came as central banks raised interest rates and tightened
monetary policy across the globe. Gold price – with its historical inverse
relation with the US dollar – has dropped as the US dollar has strengthened in
line with tightened monetary policy. Competition from higher-yielding
investments has also seen a shift away from gold.
Demand from central banks has increased
to 180t from 90t in the March quarter as geopolitical uncertainty from the
Russian invasion of Ukraine continues. However, the majority of central bank
demand has come from only a few countries and does not necessarily represent an
overall global trend; most central banks, including developed central banks,
kept holdings flat.
Supply was up 4% to 21,745koz during the
June quarter, driven by increases from Africa and the Americas, as well as
brownfield expansions and the reopening of Chinese mines. AME forecasts supply
will continue to increase in the September quarter and in 2022 overall.
Gold recycling was down 3% in the June quarter but up 5% on year.
Recycling in the first half overall was up 8%, its highest level in a first
half since 2016. India, Turkey and European countries saw increases in
recycling during the period. China’s recycling was down due to new waves of
Covid infections and city-wide lockdowns. AME expects recycling output to
continue increasing in 2023, especially as China’s recycling capacity reopens.
Greater recycling will reduce the industry’s emissions in the medium and long
term.
Gold Fields’ Agnew mine in Western Australia has invested in renewable
energy and battery storage to reduce costs and emissions. The gold mine has
become the first in Australia to install wind turbines, as part of a new
microgrid that includes solar, battery storage and a backup gas turbine. The
five new wind turbines have a collective output of 18MW, paired with a 4MW
solar farm that contains nearly 11,000 panels.

