Gold prices will ease with the improving economy, and revenue will grow moderately.
Los Angeles, CA (PRWEB) September 13, 2013
Although US production of mined gold and silver ore reached its lowest point in about 20 years in 2011, the Gold and Silver Ore Mining industry still achieved its second-highest revenue in more than a decade. This contradiction reflects the power that metal prices, which are traded on world financial markets, have on the Gold and Silver Ore Mining industry's performance. In the five years to 2013, industry revenue is expected to climb at an annualized rate of 11.2%, while gold prices rise at an annualized rate of 12.0%. Investors seeking a safe investment after the recent economic downturn have driven growth and global demand. In 2013, however, revenue is expected to drop 6.3% to $13.1 billion as prices drop due to slowly receding uncertainty regarding the Euro debt crisis. “As advanced economies shake off the recession, investors will diversify their investments, injecting cash into equities and bonds at the expense of gold and silver,” according to IBISWorld Industry Analyst Agiimaa Kruchkin. Consequently, investment demand will grow slowly in 2013.
Meanwhile, demand from jewelry manufacturing, the industry's primary domestic market segment, has mostly declined in recent years due to increasing gold prices and falling consumer demand. In fact, jewelry's domestic share of industry revenue is down from 2008.
As demand for silver and gold grows domestically and internationally, prices are expected to follow, albeit not as rapidly as after the recession. Meanwhile, a lack of investment in exploration and mine development in the 1990s and early 2000s has made it difficult for industry operators to boost production to meet current demand levels. Gold production dropped consistently from 2001 to 2009, but increased in 2010, 2011 and 2012 due to the recent surge in investment. “In 2013, US gold production is expected to grow marginally, discouraged by falling prices,” says Kruchkin. Meanwhile, the four largest industry firms have invested in mine-expansion projects to reap the benefits of high gold and silver prices. As US economic growth ramps up in the five years to 2018, upward pressure on gold and silver prices will ease.
For more information, visit IBISWorld’s Gold & Silver Ore Mining in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Gold & Silver Ore Mining industry mine gold and silver bearing ores. Mining includes the development of mine sites and the on-site processing of ore into a concentrate or bullion. Firms typically retain ownership of the semi-processed gold or silver products and pay for further refining on a toll-charge basis. The refining process is included as part of the copper, zinc and lead refining industry (IBISWorld report 33141).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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