Gold mines shut down, prices go up
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Gold mines shut down, prices go up
TEXT OF STORY
Scott Jagow: The price of gold moved higher today. It’s flirting with record highs around $920 an ounce. One reason is the dollar. And another interest rate cut will only weaken the dollar more.
But there’s a second reason gold prices are so high: South African gold mines are shut down because of severe power outages in that country. Gretchen Wilson reports from Johannesburg.
Gretchen Wilson: The shut down affects the world’s biggest platinum producer, Anglo Platinum, as well as major gold producers. Each day without steady power costs the country’s mining industry $27 million.
South African officials have called the power cuts a “national emergency.” And they’re scrambling to fix it with a mix of rationing and reduced exports to neighboring countries.
Economists say the power cuts and the mine closures may have enormous, far-reaching effects on South Africa. Experts say it will affect its currency, trade deficit, and ability to attract foreign investment.
Dennis Dykes is chief economist at South Africa’s Nedbank:
Dennis Dykes: This is a crisis that really has to be addressed. At the moment, we are working on the assumption that it will be sort of a month-long problem.
Financial experts here say they haven’t had so many panicked calls from investors since the aftermath of September 11.
In Johannesburg, I’m Gretchen Wilson for Marketplace.
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