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Deadly Riots Recharge Gold Bull Market

Wealth Daily Weekend Edition

Written by Brian Hicks
Posted September 30, 2012

World events are systematically pushing precious metal prices up after months of distorted market views.

On top of the central banks' foolish quantitative easing policies, unrest in the Middle East, tension in Asia, and the depleting value of the dollar and euro...

Continued and increasing violence in Africa this week threatens political stability — and the world's supply of gold and platinum.

Gold Riots and Fatalities in South Africa

The South African Press Association reported approximately 20,000 transportation industry workers are currently on strike, in addition to about 80,000 other miner strikers.

Almost 100,000 workers are now on strike nationwide.

Strikers were met by security forces with rounds of rubber bullets at a factory in Howick, according to Regional Secretary Mbuso Ngubane from National Union of Metalworkers of South Africa.

Forty-six have been pronounced dead.

As the world's third-largest gold producer contributing to 20% of the world's gold production, these strikes have a major impact on mining companies and their ability to meet consumer and industry demands.

Steep Price of Struggle

Earlier this month, we told Wealth Daily readers about brutal strikes at Lonmin's Marikana platinum mine. After police murdered at least 40 miners, the 270 survivors were charged with the murders.

South Africa is responsible for producing 70% of the world's platinum. Consequently, the South African platinum mines were closed and the price of physical platinum soared.

Despite the Lonmin settlement (including a 22% pay increase for workers), the situation has only gotten worse, as Thursday's news reports indicated...

Miners have told reporters that they are still being shot at, harassed, and intimidated by police and army men.

Continued strikes at Anglo American Platinum Ltd. (AMS) — the largest producer of gold — run the risk of major job losses as 21,000 employees refuse to work until the required resolution procedures are followed.

AngloGold, the world's third-largest gold producer, announced production at all of the company's South African mines has been ceased until further notice.

While the investment climate remains challenged in South Africa due to concerns for future political stability, gold investors with physical coins and bullion are guaranteed to see some enormous returns in the aftermath of these strikes.

When looking at the gold market as a whole, you should expect the severity of these strikes to strongly impact gold prices in the months to follow...

Prepare for prices to rise rather sharply amidst supply disruptions.

China's Role

China's also giving gold a boost this week.

News of a Chinese investment in an Australian gold mining company has given gold a lift: Prices jumped 1% on Thursday, adding $26.90 and setting a new seven-month high of $1,780.50/ounce.

Gold hasn't traded that high since February 28.

Times Colonist reports: “In turn, the gold-heavy materials sector was one of the biggest gainers on the TSX, up 2% for the day with shares in Barrick Gold Corp. up 1.6%, or 66¢ to $40.97.”

Take Action

Last weekend, I told you there was already a tremendous scarcity of gold and silver in the world, which makes precious metals investments worth more than anything else you can or will be able to invest in in the foreseeable future...

This week's events have heightened — and quickly accelerated — the seriousness of the supply crisis at hand.

Precious metals will start rising quicker than any gold bull could have imagined. Buy while you can.

Farewell for now,

Brittany Stepniak Signature

Brittany Stepniak

Brittany Stepniak is the Project Manager and Editor for the Outsider Club. Her “big picture” insights have helped guide thousands of investors towards achieving and maintaining personal and financial liberties while pursuing their individual dreams in lieu of all the modern-day chaos.

*Follow Outsider Club on Facebook and Twitter.

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