Healthy gold price dampens M&A
On Thursday the price of gold added to its gains in the wake of a fairly dovish statement from the US Federal Reserve about the pace of interest rate hikes with December futures trading on the Comex market in New York exchanging hands at $1,336.50 an ounce in European trade.
"Folks who may have been knocking on our door have gone the other direction now that prices have come up"
Gold touched a two-year high in July around $1,380 an ounce and year to date the metal is up more than 25% or $280 an ounce, one of its best annual performances since 1980.
At the annual gathering of the gold mining industry in Denver, Gary Goldberg, CEO of world number two producer of the precious metal Newmont Mining, told Reuters that "if the industry experienced lower gold prices for longer this year, there would likely have been more mergers and acquisitions":
"Folks who may have been knocking on our door have gone the other direction now that prices have come up," he said in an interview at the event in Colorado Springs.
According to Thomson Reuters data gold mining companies have tied the knot in 142 deals worth a paltry $4.6 billion this year, down from the $6 billion in the same period last year.
In 2010 gold miners signed off on $37 billion worth of deals, but much of their value was written down in subsequent years as gold retreated from its post financial crisis highs.