South Africa strike gold substantial influx of gold production is expected to further exploration 1,000 U.S. dollars

Source: China Securities News Author: Reuters have Yingqi

South Africa, the recent influx could strike gold production decreased significantly coincides with increased global demand for gold hedge against inflation, the international gold exploration is expected to further 1,000 U.S. dollars / oz.

Strike by production continued to drop

In response to the South African Trade Unions (COSATU) on protest food and energy prices soaring, with 320,000 members of the South Africa National Union of Mineworkers (NUM) will be on August 6 for a national strike.
Recently rising energy costs substantially increase the miners direct transport costs, rising interest rates led to the workers could not afford rent, and the high price of food is the millions of miners hovering at the edge of hunger, NUM hope that the strike by miners from the departments concerned to live the status quo Attention, and to take effective response measures. In addition, South Africa have taken place across the country more than the deaths of the miners were attacked, security is always NUM has not improved since the end of the 07 re-launched a national strike, one of the leading causes.

NUM also said it has organized against the world's fourth largest gold producer in South Africa Jintian companies (Gold Field) to strike, asked them to strengthen safety measures. First half of this year, Jin Tian has 23 workers dead, July 15 miners in the early morning have a kloof mine victims. The company has also planned in August cut-off day, the miners to reduce casualties. As Jintian South Africa's second-largest gold producer, the country's gold production will yield a certain extent. Jintian current gold production of about 70-75 kilograms (2471-2648 ounces).

On the other hand, Jintian Group as a joint venture in China the first gold mine Macao and China's largest shareholder, with China close to the mining industry. Although the strike was only South Africa, but production will reduce the whole group profits, in turn affect China's gold market and gold-related stocks. At the same time, the Japanese government in July to solve the problem of high oil prices of new measures against South Africa as well as high oil prices and high grain prices at the strike will convey enough information from Governments to jointly control oil prices also cause for concern.

South Africa Mining Board data show that by March 2008, the country's annual output of 254.7 tons of gold, second only to China. Because of security problems caused by strikes and the power restriction policy has been in the first half of the South African gold production fell 7.4 percent. July 9 to August 6 period, many mining areas will face shutdown caused by the strike because of the situation, resulting in the South African gold output decreased. Gold SPDR Trust Fund on July 11 holdings increased 7.2 percent to 705.9 tonnes, breaking the March 17 high of 663.8 tonnes of the record indicates that demand in the market experienced a four-month period of weakness has started to recover. This will result in gold supply and demand fundamentals on further tightening, the formation of positive factors supporting the gold price.

U.S. dollars and is still supporting oil prices

Medium term, the less likely the Federal Reserve raising interest rates this year. Bernanke before and support the Government of the strong dollar's speech did not bring real effect, given the current strong economic fundamentals than the countries are raising interest rates to inflation, the dollar and the currencies of these countries will not narrow interest rate differentials. At the same time, the debt crisis erupted in 2001 after Fannie and premises of the U.S. crisis signifies the end of the global economic impact of the financial turmoil there is still a long way to go. Before the economic recovery in the United States, the dollar will remain weak, which will make the U.S. dollar is negatively related to access to support oil prices. Despite the recent price pullback row, including Japan, but apart from a few countries, OPEC and other countries are not taken to curb high oil prices, continued market speculation, is expected oil prices over a period of time will remain high, By means of high global oil prices pushed inflation in the short term will not come down.

Nearly 30 years of monthly fluctuations of the statistics show that in September and October are usually the best performance of gold. Mainly by the world's largest gold importer and consumer of religion in India and the wedding season before the onset of gold on the purchase of support activities. Vietnam's financial crisis, outside India as the most likely countries in similar circumstances, the people of India and may be purchased for the value of gold and other emerging countries consumers may also make the same move, so that gold consumption ahead of the peak season Arrival.

International gold in four consecutive trading day down after July 9 began to appear substantially Elevated and in the subsequent five trading days was up about 6.7 percent, while crude oil prices on the same trend for cross-sing. South Africa, the longer the duration of the strike, involving a wide range, maintaining and increasing global demand coincided with the rise of the occasion, or will drive gold once again shaken by thousands of U.S. dollars mark. At the same time, gold consumption in the coming season and the weak dollar, high inflation and the tense situation in the Middle East by factors such as strong support, is expected in 2008, the year a new record high, and in the longer period of time to maintain a bull market pattern.