Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
Reuters reported today that “Kyrgyzstan’s economy will grow by barely a quarter of the 7.5 percent originally forecast because of the collapse in output from the nation’s flagship venture with Canada’s Centerra Gold.”
Kyrgyzstan, a former republic of the Soviet Union, relies so heavily on gold export that when Centerra Gold’s Kumtor mine had low production due to ice movement, the country’s GDP contracted by 6.4% in January-May of this year.
Even without the advancing ice, Kumtor has been plagued with disruptions. In December access to the mine was blocked for a week by community protesters seeking greater involvement in the mine.
The strike, which lasted more than three months required Centerra to comply to regulatory changes requiring that social fund contributions be deducted from wages including premium payments for work at high altitude.
In operation since 1997 Kumtor last year represented over 10% of Kyrgyzstan’s GDP and as much as 60% of its industrial output. Kyrgyzstan holds 33% of the mine and Centerra the remainder.
