Has Gold Reached the Top?

Gold hit a two-week low because the dollar increased in value against the euro. This happened because the European Central Bank president, Jean Claude Trichet, said he sees problems with the euro in the midst of our credit problems. But hang onto your hats, gold is about to head back up.

More news about the over 3,000 gold miners who went trapped for hours at the Harmony Gold "Elandsrand" mine close to Cartetonville - west of Johannesburg. All are accounted for and almost all are back at the surface. Because of the Harmony Gold mine accident, where a broken pipe cut power cables to an elevator, gold prices will increase.

Harmony Gold is the fifth largest producer of gold in the world. But its track record isn't the best. In September there was a fire at the St. Helena Mine close to Welkom. This almost drew production to a halt. Many experts say that Harmony Gold skimps on safety and that is why these accidents happen. Because they don't want to spend money on safety, it really costs them more in the end - or does it?

South Africa gold mines are dwindling. In 2006, the production for gold for South Africa was 275 tons. That may seem like a lot, but the yield in 1970 was 1000 tons! The industry has to keep digging deeper and deeper and that's where you run into safety problems.

So how does this affect you? I suggest buying now, possibly gold bullion, or futures, as gold will increase soon. Looking at Harmony Gold, if officials require new safety measures, and I believe they will, then costs for getting the ore out of the ground in South Africa's deep pit mines is going to be more expensive.