Precious metals seem to have lost their lustre with investors and the markets after a price meltdown.
Gold, silver and copper and three of the most popular precious metals, but also among those performing the worst throughout 2013.
The glittering 2011 performance of gold, which hit $1,900 an ounce during the year, has seen tarnished returns in 2013 as the price slumped to $1,200.
And the opinion of experts at wealth managers and financial firm PwC is that gold could well slip back more next year.
The research shows the people that should know – gold producers – lack confidence in the metal with less than half (47%) expecting the price to rise in 2014.
Metals tarnished
The figure shows how the mighty has fallen, as 88% predicted gold prices would rise during the course of this year.
Nevertheless, however bad gold performed, the returns on silver were even worse.
Prices plunged 40%, but producers are confident silver has nearly hit the bottom and prices will not fall more than 10% in the coming year.
Copper took a beating as well, as prices plummeted from $3.70 a pound in January to $3 a pound.
The metal producers are among the most confident in the industry, with 62% expecting prices to stabilise around the current mark.
Keeping costs down to maintain margins is a top priority for mining companies as prices fall, said the report, which also revealed:
- Managing business costs is the most important business target for 66% of mining companies
- 54% of mining companies need to raise finance
- 20% of mining firms are mulling mergers or acquisitions
- 53% of miners are seeking equity finance, 29% need project financing and 14% are seeking help from the banks
Tighter management
Jason Burkitt, PwC’s UK mining leader, said: “This year has been a tough 12 months for mining companies, but the industry is telling us that a recovery is on the way.
“Prices for gold, silver and copper may not hit record levels, but prices should increase as the global economy picks up and hauls up demand at the same time.”
“Mining companies are also looking at their own finances to trim excess and run tighter operations after spending a lot on mergers, expansion and acquisitions in recent years.
“If they want to encourage investors, they need to show they are managing their businesses to wring every little bit of profit out of their earnings.”
