Gold prices – expectations for Azerbaijan

/By AzerNews/

By Gulgiz Dadashova

The price of gold, which acts as a “safe haven” every time stocks crash around the world, has shown a rising trend in recent days.

Although the metal lost 0.6 percent of its value on September 4, the first decline in four days, gold futures showed their highest level in more than two weeks on the US Comex exchange. Bullion for immediate delivery fell 0.1 percent to $1,132.97 an ounce at 2:11 p.m. in Singapore, according to Bloomberg generic pricing.

The recent rise is seen as part of ongoing volatility in equity markets as well as a result of low oil prices. Some experts predicting that future prices are likely to drop in the coming month due to prices rooted in a very narrow range.

However, others claim that September historically has been bad for stocks, but good for gold. The reason may be that when equity markets are down, investors look toward gold to make some profit.

The post-monsoon wedding season in India, the world’s largest consumer of gold, along with Diwali, which typically boosts demand, are cited among other reasons for the rise in gold prices. In addition, jewelry makers always restock in September in advance of the Christmas shopping season in the United States. Thus, September has been the best time for gold in terms of price appreciation.

News for Azerbaijan

The latest round of global economic instability, together with a drop in oil prices urges people to be more cautious while diversifying their reserves. However, expert Vugar Bayramov believes that investing in gold will be a better option, at least for Azerbaijanis as the rising gold prices positively affect the economy.

“The price for gold increased by 4 percent in the past month. Accordingly, the price of gold is at $32 a gram in the world market,” Bayramov said, noting that high gold prices affect Azerbaijan’s economy from two sides, both positive.

Firstly, Bayramov explains, rising gold prices bring dividends to Azerbaijan’s oil fund SOFAZ, which owns 30,175 kilograms of gold as of today. The rising prices bring more benefits to the country, as the country’s assets rise.

Energy-rich Azerbaijan, Bayramov further stated, is also engaged in producing gold. “Given than the country is producer-exporter of gold, rising prices will bring more money to the state budget.”

“Azerbaijan is among the countries interested in the high gold prices,” he stressed.

The country began to develop its gold mines only recently and is operating quite modest volumes of output so far. However, the main positive trend is linked with the increased pace of output. Azerbaijan has increased its gold production in 2014 and also sped up the exploration of new deposits. The aggregate potential of all fields available in Azerbaijan is estimated at about 1,500-2,000 tons of pure gold.

As a leading company extracting precious metals in Azerbaijan, Anglo Asian Mining plc, developed Azerbaijan's first operating gold/copper/silver mine, Gedabek, which commenced gold production in May 2009.

Gedabek is a poly-metallic deposit from which Anglo Asian produces gold, copper, and silver from its open pit mining operation located in the underground Gadir mine. The company also processes ore from its Gosha deposit, approximately 50 kilometers away from Gedabek.

During the second quarter of 2015, the company extracted 18,745 ounces of gold from Gedabek. For the first half of 2015, the company produced 35,938 ounces of gold, some 2,182 ounces of which were produced from ore mined at Gosha.