The price of gold has been trading at well over $1,700 an ounce since late last week. That’s after spending most of the last several years in the $1,300 range.
And the two companies that by far account for the vast majority of gold mined and sold in Nevada are trading at or near 52-week highs. Newmont stock rose 13 percent Tuesday alone. Barrick gained 11 percent on the day.
When the rest of the economy is suffering, investors look to gold as a save haven. In the current extraordinary economic collapse, the price of gold and gold mining stocks are skyrocketing, and analysts expect prices of both the metal and the mining corporations’ stock to continue rising for the foreseeable future.
The rising price of gold could, in theory, provide Nevada at least a bit of a cushion, if not for the overall state economy, then at least for the state’s budget. But Nevada’s mining tax regime allows the industry to deduct the majority of the value of the mineral — as much as 70 percent of the value of gold produced in Nevada is effectively untaxed. In 2018, of nearly $8 billion of mineral production, the state general fund got about $50 million, or about six-tenths of a percent of the total value. Under the current mining tax structure, gold’s rally won’t do much to stave off budget cuts being telegraphed by Gov. Steve Sisolak.
That will be a replay of the experience after the economic crash of 2008, when gold soared but gold tax revenue, which is not a major source of Nevada tax revenue to begin with, did little to offset steep declines in sales and gaming tax revenue.