The situation for gold investors looks even brighter this week, as it has been reported that gold production in South Africa dropped 17% in the first quarter of 2008.
This is good for investors because as global demand is greater than the global supply, prices will rise. Demand in developing economies such as China and Russia remains strong and shows no signs of letting up.
The production drops were largely a result of the instability of the electricity supply servicing the mines. Mines have been asked to ration their electricity use to prevent total closures like the ones we saw for 5 days in January.
This is yet another element that limits the supply of gold and will likely drive its price higher.