Friday, April 21, 2006

South Africa Breathes a Sigh of Relief

The rise in the SA rand/dollar exchange rate was beginning to worry the locals, but reassurance has come from the recent extraordinary rise in the gold price. The fretting was based on the fact that any rise in the rand would offset the advantages offered by an increase in the dollar price of gold.


[Thanks to namibia-info.net for the photo.]

South Africa has held the leading role as gold producer for a long time, but now that status may be challenged. To quote an article from dispatch.co.za:

"The South African gold mining sector is the largest in the world, but New York-based commodities analyst Jeffrey Christian said earlier this year that if South African output remained at these levels, the country may lose its status to China within the next five years as China’s annual output had been increasing at a rate of 5% a year." (source)

Who knew? If China becomes its own supplier of gold reserves, that changes the dynamics a bit.

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