Gold has an emotional connect with people which is why it is much sought-after. While the front-end looks glitzy and glamorous, there are issues that the industry faces due to increasing demands of workers’ safety, environment concerns and adoption of environment-friendly technology. Those who dabble in gold mines are no small players and are quite adept at handling issues. However, even the best need advice from time to time and it is here astro-strategist can provide holistic solutions
The value of gold it is said is not because of its availability, but its scarcity, just like the diamonds. The yellow metal surely makes heads turn and is a symbol of status. Gold is traded world over, despite changing fashions and trends. But gold continues to remain in fray and is every woman’s dream.
Of course, men look at investment, but so do women. Gold is passed over generations and this makes it all the more special. It is on this sentiment that the gold industry thrives. There is a warm connection with gold and that’s what makes the world go crazy over investments in gold.
Recently, a huge haul of gold was discovered in Turkey, making it one of the biggest assets found in recent times. Little was Turkey prepared for this golden treat. But it did happen and has taken the world by surprise.
There are various factors that determine the value of gold, but despite all ups and downs in the industry, gold remains crave-worthy. Of course, not everyone might like to hoard on jewels as they prefer pure gold in the form of bullion. Well, there are those that want a good share of both.
Incidentally, the jewellery industry accounted for 48.5 per cent share of global gold demand in 2019, which amounted to about 2,118.6 metric tons.
Gold is primarily mined in South Africa, USA (Nevada, Alaska), Russia, Australia and Canada. Much of the gold trading occurs in over-the-counter markets on gold trading desks around the world. The traders trade gold on behalf of their clients who include miners, central banks, ETFs, jewellery and industrial manufacturers and of course, in some cases, their own accounts.
Why is the gold industry crucial?
1) Gold mining provides significant sustainable development in the countries it is mined. Mining also helps bring infrastructure investment to a region and helps initiate and support associated service industries.
2) It has been observed over decades that when gold prices are high, it signals that the economy is not healthy. Investors buy gold as protection from either economic crisis or inflation. Low gold prices mean the economy is healthy, making stocks, bonds or real estate more profitable investments.
3) The yellow metal is abundant enough to create coins, but is rare enough so that not everyone can produce them. For starters, gold does not corrode, hence providing a sustainable store of value.
4) Humans are emotionally and physically drawn to it. Societies and economies have placed value on gold, thus increasing its worth.
5) If one studies history, throughout history, the entire planet has used gold to symbolize power, beauty, purity and accomplishment. Gold is still used in wedding jewellery, Olympic medals, Oscars, Grammys, money, crucifixes and ecclesiastical art.
6) Then of course, there is bullion, which is considered one of the safest ways to invest in precious metals.
7) Harvesting water from snow: Responsible gold-mining companies are mindful of their impact on the local environment and some are using their expertise in water management to assist communities in remote areas.
8) Gold mining requires a skilled workforce. The infrastructure, equipment and training in use in mining operations often have wider benefits to communities beyond their immediate economic impact.
9) Gold is found in developed and developing countries. Some gold-mining companies are working to help overcome challenges faced by low-income and remote communities, such as access to financial products.
10) Health insurance is provided to communities around mining regions in some countries.
11) A supply chain of needed goods and products is developed due to mining activities.
12) Like many industries, the gold mining industry is also adopting ethical practices that are less hazardous to their employees. Solar power, battery electric vehicles, setting up emission reduction targets, providing renewable energy options, using hydropower to control pollution levels are some of the overall benefits of the gold mining industry.
Challenges in gold mining industry
The mining industry has to face a variety of problems due to scarce resources, to uncertainty around commodity prices, miners are forever looking to circumvent the problems in the industry.
a) Access to energy sources: As resources are becoming scarce in some areas or getting depleted, companies are forced to push new frontiers of exploration. However, this can lead to extra costs than traditional mining and could leave companies more reliant on rental power solutions.
To reach the resources that remain, mines are increasingly being established in off-grid locations and their life cycles are decreasing. This means that the companies no longer want to develop infrastructure around such communities. Instead remote mines are now utilising scalable micro-grids that can evolve with lifecycle, improving flexibility and efficiency.
b) Mining is a dangerous profession due to unsafe gases emerging from the mines. Due to this, mining has given rise to new issues. As mines get deeper, there is a risk of them collapsing. With rise in surface temperatures and an increasingly unpredictable climate, the temperature of a mine is more likely to fluctuate. Due to this temperature control has become pertinent. Right now, there is growing emphasis on the importance of ventilation systems to ensure workers are kept safe from dangerous fumes.
c) Access to capital: Access and allocation of capital is one of the biggest problems of the mining industry, more so for junior miners. Rocketing exploration and production costs have impacted margins and left investors to stay off from further investments. The junior companies have bigger problems as they do not have enough capital and nor can they raise capital to invest in expensive mining practices. Flexible finance has become one popular solution, but lack of access to capital has meant numerous hi-profile projects being scrapped, shelved.
d) Volatility of commodity prices: Volatile commodity prices have resulted in companies being unable to plan their expenses and revenues. Recent disruption in commodity prices has led many companies to close down operations or make serious cuts in the size of their workforce. Therefore, mining companies are focusing on improving efficiency and reducing cost more than ever.
e) Environmental footprint: Traditional mines were heavily reliant on diesel-powered engines for electricity, which were hazardous. But now, the mines are using hybrid energy sources for mine operations. By combining renewable with thermal generation and battery storage, mines are able to increase efficiency while reducing the carbon footprint and overall costs.
Worth of gold industry in India and globally
Gold had a remarkable performance during the first half of 2020, increasing by 16.8% in dollars, outperforming all other major asset classes.
As for Indian market, the investments in the yellow metal are considered to be profitable if experts are to be believed. The price of gold is expected to surge to Rs 63,000 per 10 gms amid New year expectations and fresh stimulus and weaker US dollar.
Revenue forecasting and estimated income forecasts are inevitable in a market that is volatile. Investors put their money in jewels and bullion, but the world gold industry is undergoing major changes that require sound and well-thought out steps to ensure that the yellow metal stays in demand.
Estimated income forecast by astro-strategist Hirav Shah
Under the challenges section, we have seen how investment-heavy the gold mining industry is. Despite all the challenges the gold industry is thriving due to demand from people. There are quite a few players who get into mining as it is a lucrative business on the whole.
But problems are inevitable and adoption of new technologies and new practices remains crucial in the industry.
But big investments need good and extremely knowledgeable consultants. Astro-strategist Hirav Shah is one such person who is extremely approachable and competent to provide solutions to those who are in the gold mining industry.
Astro-strategist Hirav Shah is known for his business related solutions and corporate logic that has helped many businesses thrive and survive even during lean periods. This is possible thanks to his astrological prowess, wherein he takes the business owner’s personal chart into consideration and mixes it with industry best practices to provide a holistic solution package to the client.
Before questioning why should I? Consider asking yourself, why not? Just like a wrong advice can spoil one’s chances, a well-thought out strategy can bail out a business head from financial issues. Astro-strategist Hirav Shah gives sound advice on estimated costs and this is ‘gold value’ to his clients.