'All time high' gold price could spur more exploration, PDAC head says
Price of gold is currently at more than $2,400 CAD an ounce
The high price of gold could prompt more exploration, according to the head of the Prospectors and Developers Association of Canada.
Currently, gold is trading around $1,800 US an ounce, which is more than $2,400 Canadian.
Felix Lee, the president of PDAC, says the price of gold started to rise last year.
"Really, that happened on the back of the U.S. federal reserving its trend on interest rates," he said. "With that, any long term gains or returns on long term investments kind of evaporated with the feds reverse on interest rates. So that kind of pushed a lot of investment dollars towards gold related products and gold itself."
He says since then, the price has continued to go up.
"COVID-19 and a lot of the economic uncertainty related to the pandemic … is also really added a lot of upward pressure on gold prices."
"It certainly seems that gold … be looked upon as a safe haven investment."
Lee says when you factor in the exchange rate between the Canadian and U.S. dollar, the price is currently record breaking.
"In Canadian dollar terms, gold is at an all time high," he said.
"We have not seen gold here … edging at $2,500 Canadian. To put things in perspective from a Canadian standpoint, this is the highest we've ever seen gold."
Lee says the high price of gold will benefit junior exploration companies looking for financing.
"The feeling is that this is going to spur exploration here in Canada," he said.
"From the mining standpoint, it's certainly going to potentially see more exploration around mine sites."
Lee also runs a junior exploration company with projects in Manitoba. He says the high price of gold is benefiting his business.
"This price of gold is very exciting because I'm actually in the middle of financing," he said. "What we're seeing on the financing end of things is considerable interest in gold projects."