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Today’s AM fix was USD 1,755.25, EUR 1,365.32,
and GBP 1,084.16 per ounce.
Yesterday’s AM fix was USD 1,763.75, EUR 1,369.80 and GBP 1,089.07 per
ounce.
Silver is trading at $34.10/oz,
€26.62/oz and £21.13/oz. Platinum is
trading at $1,647.00/oz, palladium at $632.40/oz and rhodium at $1,075/oz.
Gold fell $10.10 or 0.57% in New York yesterday and
closed at $1,751.30. Silver hit a low of $33.32, but it recovered and rallied
back finishing with a gain of 0.56%.
Gold inched up on Thursday but continued tension over
the eurozone debt crisis has bolstered the dollar,
weakened oil and is expected to limit bullions gains.
Protests against government austerity are on the rise
in Greece and Spain and have led to violence against police in Athens.
Downward pressure on oil is negative for gold. Higher
oil prices, a sign of soaring inflation, sends investors to gold as a hedge
to rising costs. The correlation between oil and gold was at 0.367, just
under a 6 month high hit earlier in the week. A reading of 1 shows perfect
correlation and the two assets move in tandem.
SPDR Gold Trust ETF saw its largest 1 day drop in
holdings since May (10 tonnes), but this may be due
to end of quarter window dressing.
Gold will continue to be supported by the ‘US
Fiscal Cliff’ which is the US government deadline to agree on a plan to
decrease the federal budget or trigger $600 billion in spending cuts, which
will create austerity for the people and a huge knock to an already unstable
US economy.
In South Africa, gold mine strikes ceased nearly 39% of
production, at AngloGold Ashanti Ltd. (ANG) and Gold Fields Ltd. (GFI), as labour walkouts spread across the country amid demands
for above-inflation pay increases.
Today, AngloGold, the world’s 3rd largest gold
producer, said all of its South African mines have been stopped. Gold Fields
lost nearly 32,000 ounces, or metric ton, of output because of strikes at its
KDC and Beatrix sites. The Kopanang mine was shut
down after a strike last week that began with 5,000 workers, and AngloGold
decided to halt all South African operations as most of its 35,000 employees
have joined the industrial action.
In addition to the mining strike there is also a
transport strike. More than 20,000 freight transport workers are also on
strike, demanding a wage increase of 12%, reports the South African Press
Association. Unions rejected an offer of a staggered increase of 8.5% next
March followed by an additional 0.5% in September, SAPA said.
The Lonmin Plc’s Marikana platinum
mine northwest of Johannesburg endured a six-week strike that took 46 lives
and concluded last week with miners receiving pay increases of almost 22%,
which is four times the country’s August inflation rate.
Due to the settlement on Sept. 20th with Lonmin platinum workers, gold miners have decided on
wildcat strikes instead of using the National Union of Mineworkers
representative’s to negotiate with employers.
AngloGold workers on strike at the Kopanang
mine since Sept. 10th were told by a company spokesman, “Wages are not
something that’s negotiated at company level, and won’t
be.”
While the company received wage demands today from the
strikers, it doesn’t intend to negotiate directly with them.
Production costs for Mining companies in South Africa
have been soaring as above-inflation hikes in wage and electricity costs have
risen in the past 3 years. Power costs rose 26% in 2011 and 25% in 2010.
Mines have to dig deeper and it is harder to yield output as orebodies continue to dwindle.
South Africa’s gold yield was 1.35 million ounces
this quarter, according to the Chamber of Mines. It was the 5th largest gold
producing nation in 2010, according to GFMS Ltd. However, South
Africa’s production has been decreasing every year.
In total there are about 100,000 miners and
transportation workers on strike in South Africa.
Certainly this disruption in production will cause a
contraction in supply, while consumer demand and central bank demand in the
yellow metal are on the rise, compiled with the central banks printing money
to bolster their sagging economies - all signal a very bullish environment
for gold.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
NEWS
Gold Set to Extend Best Quarter Since 2010 Amid Mine
Strikes – Business Week
Gold prices slide 1 percent to two-week low
- Reuters
Gold futures tumble amid Europe worries
- MarketWatch
South African Strikes Halt 39% of Nation's Gold
Output – Business Week
COMMENTARY
Not even the great economists of history can get us
out of this fix – The Telegraph
Spain is turning into the new Greece, and Rajoy has himself to blame – The
Telegraph
Historic coin collectors strike gold
– The Telegraph
Quadrillion Dollar Derivatives Market 20 Times
Global GDP – Truth-Out
Mark
O’Byrne
Goldcore
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