The Impact of Central Bank Gold Sales on the Canadian Gold Mining Industry

Introduction Gold Mining is an Important Economic Activity in Canada n Total value added during 1990-99 was $15.5 bn n The gold price is an important factor in the value added process n The gold price affects gold mining output, profits, exploration expenditures, employment, etc. Some Factors that Affect the Gold Price n The value of the US Dollar affects the US Dollar price of gold: a weaker US$ correlates with a higher gold price n Supply affects the gold price: the higher the supply on the market each year, the lower the average gold price that year Central Bank Gold Sales n Yearly central bank gold sales add to supply, and affect the price of gold negatively n The negative impact on the price of gold reverberates through the Canadian gold mining industry n Despite the modest amounts, even Bank of Canada gold sales affect the Canadian gold mining industry