Gold prices could be spurred by decline in South African output

New data released today (August 7th) has suggested that gold output in South Africa fell by 12.3 per cent year-on-year in June.

The fall is being attributed to the plight of state-owned power utility Eskom, which suffered a near collapse in its electricity grid in January.

The crisis hit to such an extent that mines all across the country were shut down for five days as a result.

Since then, the country - which is the world's biggest source of platinum and also the second most prolific producer of gold - has only returned to supplying 90 to 95 per cent power to mines.

The upshot for anyone interested in investing in gold is that with reduced output and therefore supply, gold prices could see a sharp upward trend in the coming weeks and months.

In addition, Statistics South Africa also revealed that overall mineral production fell by 6.3 per cent during June in comparison to the equivalent period last year, while production of non-gold minerals also declined by 5.4 per cent.