-- Posted Monday, 18 June 2007 | Digg This Article
Two developments in the platinum market have prices jumping this morning. One of the largest platinum mines based in South Africa has gone offline for a week due to some safety concerns and mining union, NUM, and Implats continue to head towards a stalemate in negotiations as Implats has not offered a new wage increase. NUM filed for a grievance with the government, the next move in beginning an official strike.
These are both smaller issues taken on their own, but considering the country-wide labor strife currently taking place in South Africa and the fact that we're now 12 days away from gold mining production going offline there and things are beginning to look much more ominous for metal supplies coming out of South Africa.
Precious metals moves should remain subdued throughout the week with few economic reports hitting the tape, but we would not be surprised to see all precious metals prices begin jumping by the end of the week as the reality of a mining strike in South Africa begins to really set into the market psyche. By week end, it will seem like the entire analyst community has reawakened to the fact that the largest producing country is heading offline in 12 days.
The key for the sector remains the challenge of crossing the $700 level for gold which had been attempted and missed several times in the Spring. With so much mine production heading offline out of South Africa as well as potentially reduced central bank sales, and the supply increase that had contained that $700 rally in the Spring, does not appear to be on the horizon.
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