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Australian Gold Production Slumped 13% in the Last Quarter to an 18 Year Low

Commodities / Gold & Silver Sep 01, 2008 - 10:30 AM GMT

By: Mark_OByrne

Commodities Gold surged at the open in Asia (from $830/oz to just over $836/oz) but has given up some of the early gains in volatile trade. It remains marginally higher in early trading in London but is under pressure due to continuing dollar strength and the failure of oil to rally significantly despite the threat posed by Hurricane Gustav.


August saw a sharp drop in the gold price and bulls will be hoping that last week’s gains (gold up 0.25% and silver up .52%) may mark the end of the summer doldrums. July and August have seen the seasonal lows in 6 of the last 7 years prior to the strong autumnal period and this is likely to be the case again especially as geopolitical and macroeconomic risk are heightened, physical demand internationally is very strong and supply is failing to keep up with physical demand.

Last week came news of shortages, delays and rising premiums in the gold and particularly silver bullion markets. Today comes further news of the continuing failure of supply increasing despite the rise in gold prices in recent years. Australian gold production has again fallen. Australia which is the world's third-largest producer, saw its gold production slump 13% in the last quarter to an 18 year low. There have not been any major gold discoveries in Australia for many years and the difficulty and cost of gold mining is leading to falling supplies year on year since 2001.

Australian fifty-dollar gold coins sit on display in a designer jewelry store in Sydney, Oct. 23, 2007. Photographer: Jeremy Piper/Bloomberg News
http://www.bloomberg.com/apps/news

South African production has been plummeting also (see http://blog.goldassets.co.uk/2008/06/19/ ). Of the world’s three biggest gold producers (China, South Africa and Australia), only China has managed to increase gold production in recent years and this Chinese gold is used in China to meet the rapidly growing demand for gold as jewellery and as an investment in China. Thus Chinese gold is not exported into the international market which remains the supply/demand balance in gold is becoming increasingly tight and is likely to lead to markedly higher prices in the coming years.

Today's Data and Influence
US markets are closed today for Labour Day, however the remaining few days of the week are data packed. The US unemployment report at the end of the week is likely to show a contraction while monetary policy meetings from the European Central Bank and the Bank of England are also on the agenda. Both central banks are widely expected to keep benchmark borrowing costs on hold at 4.25 percent and 5.0 percent respectively as they balance the treat of recession and persistently high inflation.

Gold and Silver
Gold is trading at $830.60/830.90 per ounce (1100 GMT).
Silver is trading at $13.68/13.70 per ounce (1100 GMT).

PGMs
Platinum is trading at $1445/1455 per ounce (1100 GMT).
Palladium is trading at $301/307 per ounce (1100 GMT).

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold and Silver Investments Limited
No. 1 Cornhill
London,
EC3V 3ND
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne Archive

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