Gold price slips as traders weigh outlook for Fed interest rate cuts
Bullion traded near $2,626 an ounce in thin trading after closing 1.1% higher on Friday.
South Africa’s besieged mining sector is about to began one of the most difficult wage negotiations in years, as the country’s chamber of mines announced Friday it is ready to kick-off salary talks for the gold industry with at least one of the two major unions.
In a statement, the chamber said the National Union of Mineworkers (NUM) and at least two small unions have already committed their participation. However, the Association of Mineworkers and Construction Union (AMCU), which represents about a fifth of gold miners in South Africa, may not participate in this year’s pay talks expected to begin early July.
Analysts agree the outcome of the upcoming talks may push gold producers to leave South Africa or simply close down all operations, as costs continue to escalate.
A decade ago, when gold prices were below $300 an ounce, most companies were at ease. Currently, even is bullion prices fall below $1,300 an ounce, as it happened Thursday, several miners are already operating at a loss.
The chamber said the NUM, which represents about 64% of the gold sector’s workforce, has submitted salary demand increases of nearly 60%. In comparison, last year’s increases ranged somewhere between 7% and 15%.
The body added it was still waiting to hear from the AMU, union that has emerged as the leading one in the platinum belt.
South Africa’s chamber of mines represents the country’s main gold producers, such as AngloGold Ashanti (NYSE: AU) (ASX: AGG), and Gold Fields (NYSE: GFI).
