SA mine halt propels gold, plat

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Syndyre

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Singapore - Gold and platinum hit all-time highs on Friday after a power crisis closed South African mines, with dollar weakness, firm oil and expectations of more interest rate cuts in the United States providing additional support.

South Africa's three main gold producers and the world's biggest platinum miner suspended production at all their mines in the country on Friday due to a power crisis, helping send precious metal prices to new highs.

Spot gold hit an intraday high of $922.40 an ounce, surpassing last week's record and up more than 8% since tumbling to a three-week low around $850 this week. Gold was last quoted at $907.00/907.70 in New York on Thursday.

"It's pointing at $950. Now there's a power shortage...everything is in favour of gold for the time being," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, referring to the power crisis in South Africa.
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This just got me thinking, call me a cynic or conspiracy theorist but if you had advance warning of the mine electricity shutdown, which a lot of Eskom management presumably did, you could've made a lot of money by buying gold and platinum in the expectation that it'd surge as they cut power. Makes you wonder...
 
That's true hey. Despite all the troubles here, there and everywhere, times for speculator investors really aren't bad.
 
tco21 said:
That's true hey. Despite all the troubles here, there and everywhere, times for speculator investors really aren't bad.
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Nothing like a bit of insider trading to boost your bonus as well.
 
No need for insider trading - it was inevitable I suppose. Only problem is, the average investor invests indirectly in Gold though gold producers like Goldfields. They dont physically take ownership of gold - they might buy into a commodities futures contract, but many private investors would not have known how to hedge themselves that way.

My bet: Goldfields will recover quickest when this passes over as they are unhedged against the gold price. This is not advice - just my personal opinion.
 
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DJStealth said:
No need for insider trading - it was inevitable I suppose. Only problem is, the average investor invests indirectly in Gold though gold producers like Goldfields. They dont physically take ownership of gold - they might buy into a commodities futures contract, but most investors would not have known how to hedge themselves that way.

My bet: Goldfields will recover quickest when this passes over as they are unhedged against the gold price. This is not advice - just my personal opinion.
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Power problems were inevitable but all mines shutting production certainly wasn't inevitable, or shouldn't have been.
 
yeah. individuals effectively can't get direct exposure to the underlying commodities themselves. Although a product like the NewGold ETF comes quite close.
 
Syndyre said:
Power problems were inevitable but all mines shutting production certainly wasn't inevitable, or shouldn't have been.
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The inevitability factor comes in because, based on the past few weeks, I wouldnt put anything past our governement! They truly dont seem to care about the state of this country anymore. And I really feel sad in saying that too! I (misguidedly) had more faith in them than they are proving they were worthy of. This will only help to fuel the divide in our country.
 
milomak said:
yeah. individuals effectively can't get direct exposure to the underlying commodities themselves. Although a product like the NewGold ETF comes quite close.
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True, but an average investor who hasnt hedged themselves against the gold price is probably not invested in ETFs anyways. I am thinking man in the street here.

OT - will this induce a bull-run for commodities followed by a major collapse. I guarantee the latest gold forecasts (+-$1000) did not take into account the current situation. Lower supply will push up the price, but when supply returns to normal levels, what affect will this have on the gold price? Is NewGold ETF a long-term investment now, or merely a speculators dream? Questions, decisions, money money money! There is more than one way to skin a cat, and I personally would like to make some money out of this k@k situation we find ourselves.
 
Mines use 12% of the countries power. The shaft where I work and the one next door uses as much power as the whole of Cape Town. lol. We used to have power all day, but today really sucked for us.
 
lsuacner said:
Mines use 12% of the countries power. The shaft where I work and the one next door uses as much power as the whole of Cape Town. lol. We used to have power all day, but today really sucked for us.
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I saw 36% quoted somewhere?
 
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