The prospect of a strengthening greenback is currently weighing on spot gold prices, casting a gloomy shadow over bullion producers. Except in Australia.
Down Under, the price of the yellow metal in Australian dollar terms is trading around A$1,700 per ounce, levels not seen the global financial crisis. The bulk of Australian gold miners pay operating costs in the local currency so a depreciating exchange rate acts a boon for them.
Divergent monetary policies are a key factor.
The Reserve Bank of Australia's decision to slash interest rates to a new record low of 1.75 percent earlier this month sent the local dollar spiraling lower against the greenback, hitting a fresh three-month low of $0.7145 Tuesday following dovish commentary from Governor Glenn Stevens.
Meanwhile, the U.S. dollar is expected to climb higher after minutes from the Federal Reserve's April meeting indicated the central bank could hike rates in June. Speaking to CNBC on Wednesday, St. Louis Fed President James Bullard said a move in June or July wasn't set in stone, but labor data suggested it was time to pull the trigger.
The favorable exchange rate has injected confidence in many Australian producers, reflected in the buoyant mood at the annual Resources' Rising Stars Conference that kicked off Wednesday.