Will Gold Market in South Africa Point to Where Prices Go?

gold price chart
Source: GoldMoney

We don’t often write on the gold market (unless it has to do with broader macroeconomic issues, industrial applications, or its role as a conflict mineral), but today something piqued our interest.

Turns out South Africa gold mining is not nearly as lucrative — or safe — as it used to be.

Reuters reported that “gold production in South Africa has sharply declined in the last seven years, knocking Africa’s biggest economy off its perch as the world’s top bullion producer, a position it held throughout most of the 20th century.” That sounds like a pretty big deal.

today's metal prices - MetalMiner IndXAccording to the news service, “Statistics South Africa data showed gold production fell by 45.7 percent in volume in October, with total mineral production 7.7 percent lower compared with the same month last year.”

Also, “production of platinum group metals rose 17.6 percent after falling almost 18 percent in September because of labour unrest.”

What does this mean for the gold, silver and PGM prices? As far as gold is concerned, the South African situation sits on the sidelines of broader issues in the traders’ markets, such as gold manipulation.

Doug Eberhardt, writing for Seeking Alpha, points to an interesting divergence between Baltic Dry Index and S&P data trends in the past couple years as a way to decipher whether banks such as JPMorgan Chase are involved in manipulating gold and silver market prices.

Current Gold and Silver Prices

On the MetalMiner IndX℠, the daily price of US gold bullion increased 0.5 percent. After improving for two days, the price of Indian gold bullion declined 0.4 percent. Chinese gold bullion gained 0.2 percent. The price of Japanese gold bullion ended a two-day climb.

The price of Chinese silver fell by 0.9 percent. The price of Indian silver changed direction with a 0.8 percent drop after two days of improving prices. US silver finished the day after a 0.5 percent increase. The price of Japanese silver weakened by 0.2 percent.

Current Platinum, Palladium Prices

With a 0.9 percent increase on Dec. 11, 2012, US platinum bar was the biggest mover on the daily Global Precious Metals price index. Japanese platinum bar finished the day up 0.3 percent. Chinese platinum bar prices rose 0.3 percent as well.

today's metal prices - MetalMiner IndXFollowing two days of rising prices, the price of Chinese palladium bar dropped 0.3 percent. After a couple of days of improving prices, the price of Japanese palladium bar held steady. The price of US palladium bar flattened after two days of improvement.


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