Goldmines in Arizona are the newest front in the battle over precious metals mining, as the state’s gold price surged more than 20 percent over the last two weeks.
Arizona Goldminers Association executive director Michael D. Pecoraro, who was among the first to warn of the impending crisis in January, said he was “heartened” by the recent surge in gold prices.
“I thought we were going to see an increase in gold, but we’re seeing a spike now,” Pecoriaro said.
Pecoriaros warning was based on his observation that gold miners in the area had “no idea” about the impending economic collapse and were in the midst of the worst economic collapse in decades.
While many miners had heard rumors of the coming economic crisis, Pecoro said, the recent rise in gold mining has forced miners to pay more attention to gold prices, which are now up more than 200 percent over last two years.
“It’s very concerning, because there’s no telling what could happen if the gold prices spike and then the prices collapse again,” he said.
“This is going to be a very big problem for our industry.”
The price of gold has surged by about $50 per ounce in recent weeks as investors rushed to secure deposits and stockpiles of the precious metal.
The price has soared by more than $50,000 per ounce since mid-September, the most since May 2011.
It’s also been the catalyst for the largest rally in gold bullion in a decade, as prices soared by as much as 100 percent from the beginning of the year to August 30.
The recent surge has been accompanied by a surge in price volatility, with gold mining prices averaging $1,300 an ounce since the beginning.
Gold prices have also jumped more than 400 percent over three months.
In addition to the increased volatility in gold and silver prices, gold miners have also been under pressure from investors to sell their gold holdings.
Many of the largest gold mining companies in Arizona have announced they will halt their gold production in the state.
The companies have faced a sharp decline in the price of the metal as a result of the recent economic downturn, but they are still expected to remain profitable as long as the price remains high.
As the price rises, many miners are also reporting that they are seeing increased demand from investors.
Percoraro said he believes that demand for gold is already at a record high, as well as the possibility of a price spike, and the prospect of a surge is a concern.
Last week, Pechoraro told CNBC’s Squawk Box that a number of miners have announced plans to halt gold production.
Although gold mining in Arizona has been booming, Percorsaros statement indicates that gold mining could soon be off the map for most miners.
“I think we’ve seen a spike in demand for the gold industry,” he added.
“It’s just a matter of when that spike happens, and when that happens, we’ll see how things play out.”