Gold News

Low gold output 'may lead to higher prices'

Gold output in South Africa fell in April as a result of problems at the state-owned utility company Eskom, which supplies power to the countries mines.

Reuters reports that figures from Statistics South Africa show gold output fell by 10.1 per cent in volume terms this April compared to the same month last year.

South Africa's electricity grid almost collapsed in January, causing mines across the country to shut down for five days, the news provider said.

Eskom, which supplies power to between 90 and 95 per cent of South Africa's mines, has since been struggling to provide enough energy for all of them.

As a result official data shows that overall mineral production fell by two per cent in April 2008 compared to April 2007, with gold being particularly hit.

Lower gold output could of course lead to higher prices as demand for the precious metal outstrips supply. Gold is already trading at around $880 an ounce as more people look to gold investing.

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