Gold News

Mining slump 'will prove beneficial for gold investment'

Omri Thomas from equity management firm Polaris Capital has claimed today (September 4th) that the gold mining industry is in the midst of a major slump.

Mr. Thomas, who is a manager of the Nedgroup Investments Rainmaker Fund, has suggested that spiralling costs are dwarfing revenue at a number of mines around the world.

Furthermore, he stated that companies are "struggling to get the product out of the ground" - a scenario which should alert anyone considering investing in gold.

If output levels continue to slide, the inevitable consequence is that gold prices will be pushed up over the coming months as demand comfortably outstrips supply.

Mr. Thomas also explained that he has been altering his investment portfolio in recent months, and has been particularly keen to decrease his stake in gold stocks.

His views appear to be corroborated by recent mining data, with Australian gold producers reporting a 13 per cent drop in production during the previous quarter - an 18-year low.

Earlier in the month, it was also reported that gold output at South African mines fell by 12.3 during June on a year-on-year basis.

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