Gold price drops affect Ghana miners

The falling price of gold is having an impact on companies around the world and it is the same story in Ghana, where miners have been badly hit by the precious metal’s dropping value.

Spot gold was as high as $1,687.22 (£1,022) an ounce at the start of the year, but this recently fell to beyond the $1,200 level as gold’s reputation as a safe haven faltered.

With the price of gold down by more than a quarter compared to January 1st 2013, miners in Ghana have been finding it increasingly hard to uncover enough of the precious metal to feed their families, leading to some to turn away from the industry and look for work elsewhere.

In the long run, this could actually have a positive effect on the price of the precious metal if shortages occur due to a lack of mining in Ghana, which has one of the world’s largest resources of gold.

Gold’s future

Speaking to BBC News, gold buyer Kojo Owusu stated that he has concerns over the state of the industry in the coming months.

He said: “People are not willing to enter into the mining business. A lot of them are leaving because the price is down. They are not investing. At the beginning of this year it was very great, very wholesome, but for the past two months it’s been very bad. Very, very, very bad.”

Miner Kwaku Boham and his partners have decided to leave the gold sector due to the lack of money in the work in Ghana at the present time, noting that “this job is not good, it’s not like the olden days”.

Gold has seen its largest annual fall for around 30 years during the course of 2013, leading some investors to speculate that the precious metal’s time as the world’s premier safe haven could be coming to an end.

While gold enjoyed a rise in its value during the global financial crash as investors sought to protect their money, the commodity has been much less successful as world economies recover from the extended period of slowdown.

Find out about commodities trading and learn CFD strategies at City Index