Platinum Mining Strikes Spread to Gold, Silver Remains Wild Card

Gold bugs are finding a mixed reception today, but there is some concerning news out of South Africa that may resemble a bit of the same concern after deadly police responses during a labor strike in South Africa last month. With South Africa, and its resource-rich companies based there working elsewhere in Africa, investors and speculators may have more of an argument that there could be supply interruptions in the global precious metals trade.

Gold Fields Ltd. (NYSE: GFI) said this morning that employees of the West Section of the KDC Gold Mine on the West Rand in South Africa “have been engaging in an unlawful and unprotected strike since the start of the night shift last night” and also said that the strike continued into the morning shift today. More importantly it said, “Approximately 15,000 employees are participating in the strike and all production at KDC West has been suspended as a result.”

Gold Fields has said that the reason for the strike remains unclear.  What is hard to not notice is the stressing of a “peaceful” situation. It was just last month that more than 30 protesters died and almost 80 were wounded in a Lonmin Marikana platinum mine protest that came after police opened fire after the situation started getting out of control. Lonmin plc (LMI.L) is trading up over 3% in London trading so far this Monday.

Workers at another mine owned by Implats in South Africa are demanding more pay from the company as well, but reports so far indicate that the workers are still on the job.

ETFS Physical Platinum Shares (NYSEMKT: PPLT) is up almost 1% at $158.23 and this is the highest price going back all the way to the first half of April.

The SPDR Gold Shares (NYSEMKT: GLD) are not up on the day, but the loss is only 0.3% and the ETFS Physical Swiss Gold Shares (NYSEMKT: SGOL) is down by the exact same amount.

The ETFS Physical White Metals Basket Shares (NYSEMKT: WITE) is up by 0.4% at $54.48 on the day, but this one has thin trading volume.

Gold Fields Ltd. (NYSE: GFI) is down by only 0.4% at $13.26 and the Market Vectors Gold Miners ETF (NYSEMKT: GDX), of which Gold Fields is almost 5% of its weighting, is down only 0.2% at $30.37 so far today.

Silver is looking more and more overextended, but we warned on Friday that this situation could remain overextended if there is no broader metals correction soon.  The iShares Silver Trust (NYSEMKT: SLV) is actually up 0.25% at $32.72 and the ETFS Physical Silver Shares (NASDAQ: SIVR) is up 0.22% at $33.45 on the day.

JON C. OGG