Gold News

Gold Investment may rise as Zimbabwe output plummets

The head of the Chamber of Mines revealed today (May 5th) that gold output in Zimbabwe plummeted by 76 percent during the first four months of 2009, Reuters reports.

Ongoing political turmoil in the country has plunged mining companies into disarray, with the vast majority forced to shut down their operations over the course of 2008.

Although miners are now allowed to sell gold to world markets, David Murangari, president of the industry body, explained that most will struggle to increase production due to a lack of capital.

He told the news provider: "The major challenge to the mining sector at the moment is financing needed to resume production as well as re-start exploration and development of new deposits. This is particularly so for gold mines."

Mr. Murangari confirmed that gold output between January and April 2009 was 355kg, compared to 1,407kg for the equivalent period 12 months earlier, while yearly production hit a record low of 3,072kg.

With uncertainty over ownership laws likely to keep companies from exploration projects, the news will be welcomed by anyone with a Gold Investment, as lower supplies could lead to higher prices.

Confirmation of Zimbabwe's plight comes after Alto Capital analyst Carey Smith claimed last week that China's moves to increase its stockpile of the yellow metal to over 1,000 tonnes could push Gold Prices back into four figures.

"It put a bit of a rocket under the gold price. I mean, it's run from about $860 when they announced it to, at the moment, about $917," he told ABC Rural.

"So it's once again trying to go through that $1,000 mark."

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