Gold Mining For thousands of years, gold has bee

In August 1971, President Nixon took the bold step of removing the American dollar from the gold standard, meaning that dollars would no longer be converted directly into gold by the American government. There were two immediate results of this action: currencies around the world returned to floating against each other, and the price of gold was no longer fixed at $35 per ounce. The stage was set for speculation in both currencies and gold.

Canada is currently the world's fourth largest producer of gold, and has been a leading producer of gold for many years. When Nixon removed the United States from the gold standard, demand from gold surged from consumer demand to speculative demand, and the price of gold quickly reflected that. With large gold reserves, Canada was in a unique position to take advantage of this opportunity, and Canadian gold mining companies (sometimes subsidiaries of larger Canadian mining operations) began exploring not only gold opportunities in Canada, but also in other parts of the world.

In 1996, Canada produced 7.1 percent of the world's gold, with $CAN3.5 billion (66 percent of production) exported to the United

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n industry is global needs to be considered as part of the five forces. Rivalry Among Competitive Sellers There is considerable rivalry among competitive sellers in the gold industry, but the rivalry at this level does not concern price or quality so much as mere availability. When working with gold ore (unlike at the retail level), price is set by the market. Consumers may not purchase gold directly from the company, but rather from a broker. Commodity goods, including gold, are by definition differentiated only by price, and that price is generally market-set. At the current time, companies which have extraction costs higher than $300 per ounce will find their profit margins seriously compressed, yet there is little these companies can do to change the situation from a price standpoint. Offering their gold for more than what is otherwise available on the market means that they would not be able to sell it at all. Availability of Substitute Products Gold is typically purchased to be used in decorative pieces, to be used in industry (on printed circuit boards, for example, or in dental work), or as speculation. There are few substitute products for gold in jewelry or in industry, although gold has fallen from favor as a
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Approximate Word count = 2414
Approximate Pages = 10 (250 words per page)

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