Gold Prices Show One-Month Low

Spot gold prices decreased on Monday after the President of the US Federal Reserve, Jerome Powell, issued more rate hikes to rein in inflation that hit a four-decade high in the world’s largest economy.

On Monday, gold prices fell 0.6 percent to US$1,727.20/oz. This is the lowest level since July 27, after the US dollar hit a 20-year high pressing negatively on the gold ingot. The prices of gold bars have dropped for three consecutive sessions to the lowest point this past month. Nonetheless, gold has a positive relationship with volatility, one of the reasons why it is considered a safe-haven investment during economic and geopolitical uncertainty. 

Meanwhile, regarding other precious metals, spot silver decreased 1.3 percent to US$18.63/oz, platinum fell 0.8 percent to US$856.93/oz and palladium gained 0.9 percent, up to US$2,128.55/oz. 

According to the US Geological Survey, Mexico produced 3.2Moz of gold in 2021, which makes the country Latin America’s largest gold producer. The top Mexican producers are Fresnillo, Newmont, Torex Gold, Equinox Gold and Agnico Eagle Mines.

Juan Carlos Artigas, Head of Research, World Gold Council, recommended Mexican mining companies and investors to continue focusing on gold, since it offers many opportunities for profits: “Gold is an excellent option to add to an investor's portfolio as it not only provides potential returns but also diversification and liquidity. We believe that in 2022, investment and management will gain strength due to inflation and geopolitical pressures.”

In 1Q22, leading Mexican gold miners saw their production diminish compared to the past year. The 12 main producers showed a combined output of 714,199oz, a 11.8 percent drop compared to the 809,735oz produced by 11 companies in 1Q21. Seven out of the 12 corporations registered lower output at their Mexican operations, 4 posted an increase and 1 reported stable production. Although production dropped, most of the companies still expect to meet their original guidance for 2022, according to BNamericas.

In 2022, Mexico is expected to produce 3.03Moz of gold, showing a decrease of 7.5 percent compared to the 2021 gold production of 3.27Moz, according to estimates made in conjunction with the 19 main gold producers in the country reported by BNamericas.