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Thursday, 24th May 2007 (8890 views)

The new demand for gold coming from Middle Eastern and Asian countries is not being met by suppliers in South Africa, according to a new report.

Lear Financial, an investment research firm, has found that political instability within South Africa has meant mines have had to shut temporarily and this has seen a fall in the supply of gold.

And with no significant new discoveries of gold mineralisation in the country, the new level of supply is not able to meet demand from investors.

"Gold is a traditional means of hoarding wealth and represents a way to buy economic security in much of Asia and the Mid East," said Kevin DeMeritt, a gold investment adviser at Lear Financial.

"And in these parts of the world individual wealth is growing rapidly."

He added that he would not be surprised if gold prices reach $900 - $1,000 (£450 - £500) by this time next year as gold production increases over the next five years, but not enough to fuel demand.

 

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