Opinion

Will South African labor problems affect metals?

J. Keith Johnson Senior Writer, The Gold Informant
Font Size:

Is it possible that continuing problems in South Africa will cause gold prices to soar? At this point it’s difficult to tell. However, it is clear that a lot of people are losing a lot of money due to the labor conflict.

Locally, economic hardship is putting a great deal of pressure on both workers and mining companies. With the latest “take it or leave it” offer from the companies being rejected by unions, the future of the mining operations is anything but certain.

For AngloGold Ashanti and Gold Fields, the strike is digging deep into profits. Between the two of them, the weekly cost is over 48,000 ounces. That’s over $84 million in unrealized gold revenues per week.

For AngloGold, which boasts one of the lowest costs per ounce in the industry ($794 Q1 2012), the current labor disagreement is costing over $28 million in profits each week, not counting operating costs of maintaining non-working mines. More information from AngloGold can be found on their Strike Information page.

A strike that started with platinum miners this summer, resulting in police shooting 34 miners on August 16, has escalated to include gold miners, among others. However, it doesn’t seem that work strikes are limited to miners in the fractured country. Truck drivers are threatening to strike now, as are many government employees.

For South Africa the current challenges run deep. Understanding the tensions is difficult for a westerner, especially if they have never spent time in South Africa. Perhaps the divide between the elite and laborers is coming to a head with this round of strikes and violence. Only time will tell. However, for the people of South Africa, this is a time of financial hardship.

While we’ve seen some decent price action in metals in the past month, it’s very difficult to gauge how South Africa has affected gold prices. Seeing precious metals pull back from February highs, a move upward was expected anyway. And it appears there may be more price increases in the near future. Fall and winter tend to be good to metals.

I wouldn’t look at Africa as an excuse to buy metals. Instead, world economies struggling, continued QE and increasing debt all point to macroeconomic reasons people should seriously consider a position in hard assets. During such tumultuous times, metals tend to hold their value very well, usually surpassing inflation rates.

J. Keith Johnson’s Austrian and libertarian perspectives on current socioeconomic and geopolitical affairs are fueled by his insatiable desire to both discover and share the truth. A Goldco Direct affiliate, you’ll find his commentary on The Gold Informant website, as well as various Internet financial and news sites.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel