Today, Fidelity Gold Refinery (FGR) gold prices breached the US$80 per gram mark today, the highest price ever paid for bullion, Mining Zimbabwe can report.
By Ryan Chigoche
The FGR bullion price has been hovering between US$70 to US$78 per gram for some time, failing to breach the US$80 per gram mark. However, this new FGR price benchmark is expected to further increase gold deliveries to the country’s gold buyer.
After reaching a historic level of US$2,480 per ounce last July, the price of gold set a new record at US$2,530 (US$90 per gram) on August 20 on the global market. Since the end of 2019, the price of gold has increased by 73%, as in late October 2019, an ounce cost US$1,459.
With this new gold price, FGR has closed the gap with global market prices, which have been on a bull run, attributed to heightened demand for safe-haven assets.
The increase in the FGR price will most likely encourage gold deliveries, which were down 2.7%, with purchases amounting to 3,400.34 kg, as small-scale miners continued their recovery in gold deliveries.
Although there was a dip in deliveries to the state entity in August, the figures represented a significant increase of 37.12% from the 2,479.78 kg achieved in August of the previous year.
In terms of deliveries, small-scale miners have maintained their output over the past three months despite fluctuations in large-scale mining activities. As of August, small-scale deliveries were up 1.27% to 2,373.05 kg, a new nine-month high, as government-led mobilisation efforts continue to pay off, coupled with an improved payment regime from Fidelity. These deliveries made up 69.79% of the August monthly total.
While Zimbabwe has not been able to fully capitalise on the rally in global prices to significantly boost its earnings, gold is expected to contribute to next year’s projected economic growth of 6%, alongside lithium, iron and steel production, and a rebound in agriculture.
The gold sector is already a major contributor to Zimbabwe’s economy, accounting for about 40% of the country’s total export earnings.
