The Canadian stock market rallied this Thursday after the US Federal Reserve made its decision to increase interest rates for the fourth time in a row. Gold price Canada has been rising and there is increased activity by investors who are rushing to the safe haven in gold. Many Canadian investors had previously hoped that the Federal Reserve would be dovish in regards to its monetary policies.
As a consequence many markets in Europe have been trading in the red on Thursday. The Bank of England decided not to change their interest rates amid uncertainties due to the Brexit political situation which is beginning to weigh in on the UK financial markets.
The gold index in Canada has increased by 4.65 percent. Companies like Goldcorp and Kinross Gold rose 2.9 percent and 3.37 percent respectively. Eldorado Gold jumped to 6.10 percent and IAMGOLD boosted by 8.79 percent.
Canadian wholesale sales have benefitted by an increase of 1 percent in October. This is higher than previously held expectations by economists who projected a 0.4 percent increase. Eurozone’s current account surplus increased from EUR 18 billion to EUR 23 billion, as revealed by the European Central Bank on Thursday.
Gold Production in Canada
The majority of production is seen in Ontario and Quebec. Canada procures at least 90% of its gold from open pit mines. The rest of it is derived from base metal mines and placer mining. The production of gold in Canada has been declining because of an increase in mature mines and subsequent reduction in investments.
It has been observed that between the years 2002 and 2007, a larger number of gold mines were discovered because of increased investment. This hasn’t been the case in the years that followed.
Participation from Aboriginal People in Canada
Aboriginal people in North America were among the first to mine gold, using it to manufacture weapons, art and other instruments. But after several decades of relentless gold mining in the country, there has been irreversible damage to the environment. Canada’s mining industry is trying hard to repair the damage done to the environment.
One adverse side effect is the release of toxic cyanide and mercury into the atmosphere. This prompted the government to setup a new group known as the Mining Association of Canada (MAC) to find solutions to the environmental epidemic.
MAC set up a program known as “Towards Sustainable Mining” which has the primary purpose to increase production of gold while maximizing use of recycled metals and minerals in a responsible manner that is helpful to the environment.
The rising price of gold is seen as a positive sign, helping to boost the economy and create new jobs. However, the challenges for Canada’s gold mines are still unaddressed, in that, there are no finances for construction of mines either big or small. One such mine, the Valley of the Kings mine is full of reserves that amount to over 8 million oz gold, just waiting to be tapped into.