Gold mining supply 'unlikely to grow'

The supply of gold from mining activities is unlikely to see an increase in the near future, it has been claimed.

Miners around the world are experiencing a number of issues in their attempts to capitalise on spiralling gold prices, Reuters reports.

JP Morgan analyst Michael Jansen explained that with many mining companies choosing to expand through mergers and acquisitions rather than organically as a result of logistics problems and worker shortages, it is unlikely that gold supply will increase any time soon.

He added that any new gold that is recovered will probably be ore that was left behind by miners because it was too low grade.

"We're still seeing some mine projects coming through, but net-net there's not much chance really of any growth in the next two years in terms of total mine supply," Mr Jansen commented.

This may be good news for those with gold investments, as increased pressure on supply could see gold prices rise even further and reap rewards for those who bought the yellow metal when it was relatively low.

According to GFMS, mining firms have seen "an increasingly difficult operating environment" in recent times, bringing intense competition for consumables, labour and key plant items.

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