Gold Shares: Gold investment outlook for South African investors

Gold Investment - 8 August 2011

On the face of it, the situation regarding the appreciation of South African gold shares looks good. The gold index is up ten percent and it looks likely that this will continue to increase. That said, it should be noted that the index is still close to five percent lower than it was in January in spite of the Rand gold price being seventeen percent higher. Many investors might feel that now is still the time to get in on the act and buy gold shares. The problem is that gold shares in this country do not experience the same boost from buoyant bullion prices that other countries enjoy.

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Factors that affect this include striking, wage increases that are higher than inflation, the strength of the Rand and power outages. Other more significant factors include the possibility of nationalization and class action suits. Many of these issues have been around for some time and they are reflected in the discount that applies to South Africa.

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Invest in precious metals today! Contact us for details.

Resource nationalism is not only a domestic issue it is a global issue too. Pundits feel that now is the time to invest in Johannesburg gold shares. This is in spite of the fact that Australian and American gold producers are not exposed to such problems. Companies such as Anglo Gold Ashanti, Barrick Gold and Newmont Mining have been discounting the gold price to about $1,300 per ounce instead of the regular levels. This means that there is potentially a rerating of twenty percent in the short term envisaged.

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