Party mood should actually prevail at gold mining companies. The price of gold has increased by around a third in dollars over the past twelve months, and by almost 40 percent in euros. An end to the bull market is not in sight thanks to billions of dollars in central bank cash injections and government aid programs. The flood of money makes buying gold more attractive as it cannot be increased at the push of a button. According to a current analysis, Bank of America believes that the price of gold may continue to rise to up to $ 3,000 per troy ounce in the next 18 months. For gold mines, which typically cost less than $ 1,000 an troy ounce, every dollar more in raw material prices means higher profits.
Nevertheless, mining companies also face headwinds. So the demand for physical gold is enormous, but at the same time the supply is stagnating, as the Swiss gold refineries in Ticino have had to close and most of the coin mills have also stopped working. Production in many gold mines also comes to a standstill in order to protect employees from being infected with the SARS-CoV-2 virus.