2012 Global Gold Price Report

View this page in: Français

Keeping up with the price of gold

PwC’s 2012 Gold Price Report assesses gold companies globally, with companies surveyed representing 26.5 million ounces of gold mined in 2011, and 37.75 million ounces to be mined in 2012.

Eighty percent of the mining executives surveyed expect the price of gold to continue to increase in 2012, with the majority of respondents expecting gold to peak at $2,000 in 2012. Sixty-two per cent of respondents reported the price of gold was positively impacting their stock price, yet the impact was less than expected. Gold has risen 23.4% so far this year, but the S&P/TSX Global Gold Index increased only 3.9% through November 30, 2011.

One main driver behind this unprecedented disparity between the price of gold and gold stocks is the recent popularity of ETFs.

This disparity is having an impact on how executives plan to spend their increased cash flow:

27% made payments to dividends in 2011, a notable increase from only 9% in 2010
29% expect to spend their cash on acquisitions in 2012, up from 19% in 2011

Outlook on Mergers & Acquisitions

To date in 2011, there have been 544 gold acquisitions with an approximate value of $11.2 billion. As of November 30, the volume of acquisitions increased 12.6% and values decreased 38.4%, compared to the same period in 2010.

Going the extra mile for investors

To provide an advantage to those investing in their companies rather than ETFs, many gold mining companies have started or increased dividends. As of November, dividend payments for the top 20 gold mining companies were up 44% from 2010. In 2010, dividends increased only 18% from 2009.

Gold-linked dividends are only one option — read the full report to learn how to get more creative with dividend strategies.

Previous editions