The Herald (Harare)

9 November 2012

Zimbabwe: Gold Deliveries Fall 7,14 Percent - Chamber of Mines

GOLD deliveries declined by 7,14 percent in September this year from about 1 200 kg a month earlier, the Chamber of Mines said yesterday.

Statistics show that deliveries were down from 1 199,9kg in August to 1 111,1kg in September due to a significant decline in deliveries by large-scale producers.

Despite the fall in deliveries, Zimbabwe remains on course to achieve a target of 13 000kg this year, above the minimum requirement for its readmission onto the London Bullion Market.

Gold output in nine months to September this year increased to 11 140kg. The chamber said gold deliveries by large-scale producers declined by 9,17 percent from 867,6kg in August to 788,04kg in September. But gold deliveries by small-scale producers increased by 2,02 percent from 332,4kg to 339,1kg during the same period.

During September, gold prices continued an upward trend, surpassing the US$1 700 per ounce price. The last two weeks of the month saw the price of gold stabilising to close at US$1 779 per ounce.

Analysts believe the rally was driven mainly by market expectations after the announcement on September 13 by United States Federal Reserve of a third-round quantitative easing in an effort to stimulate growth.

The Federal Reserve also indicated it would introduce additional monetary steps if the US does not show clear progress in the short-term and pledged to keep rates low until mid-2015.

The growth in demand for gold in India coupled with the appreciation of the rupee (India currency) and the decision by the Bank of Japan to increase its stimulus plan by 10 trillion yen are other factors that contributed to the upward trend in gold prices in September.

Expectations from China to issue additional easing steps to help jump-start its economy and expectations of the market from the European Central Bank to introduce a bond purchase programme targeting Spanish bonds also contributed in the upward surge in gold prices.

Following the closure of various gold mines in Zimbabwe at the height of its economic crisis, the liberalisation of gold trade by the Reserve Bank and fresh capital injection saw major gold mines re-opening in 2009.

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