CHART: Gold miners' reserves pricing assumes big rally ahead

After a wobble on Monday following Friday's big rally, the gold market managed modest gains during quiet trade on Tuesday gaining slightly to $1,163 an ounce.

Gold is trading not far below its opening price for 2014 and has recently been flirting with levels last seen April 2010.

The new sub-$1,200 an ounce reality in the gold market has not filtered through to many miners it seems.

According to a survey by consulting firm PwC for its new Gold, Silver and Copper Price Report 2015, 60% of gold mining companies expect the price of gold to head lower in the next 12 months. That compares to 7% last year.

Despite this pessimism however, gold miner's longer term assumptions assume a strong recovery in the gold price from today's levels.

When asked what gold price companies are using to determine reserves, the average among respondents was $1,241 per ounce, with a range of between $950 and $1,350. For resources, the average was $1,331 per ounce with a range of between $950 and $1,600.

Perhaps the apparent disconnect can be explained by the fact 46% of respondents said they relied on management’s internal estimates as their main source of determining price, while 28% relied on consensus pricing. Another 10% looked more at the spot price, 8% at the forward curve, and 8% relied on historical averages.

CHART: Gold miners' resource pricing assumes big rally ahead

Source: PwC