South Africa Go for gold!

Post by : NGDlover Fri, 09 Oct 2009 13:04

Despite the fact that South Africa used to be the largest producer of gold in the world, it was illegal for South Africans to own bullion. However, a gold expert told I-Net Bridge that this law has now changed and it is the first time since 1911 that South Africans are allowed to own bullion.

David Levenstein, a leading precious metals expert, told I-Net Bridge in an interview: "This is fantastic news. Can you imagine that such a law existed for nearly 99 years? The law in China which precluded Chinese citizens from owning any form of bullion for the last 50 years was also changed this year."

In fact, the law was so Draconian that the mere possession of a gold bar could result in a substantial fine of many thousands of rands and/or a term of imprisonment.

Levenstein says the changes have come about thanks to South African-based refinery, Metcon, which was established in 1989 and received permission from the South African Diamond and Jewellery Regulator, as well as the South African Reserve Bank, to produce and sell minted bullion bars in May this year. They are currently producing gold, silver and platinum bars.

Gold has tripled since 2001

"During the last two years while the prices of global equities and properties collapsed, gold has been one of the few asset classes to retain its value. In fact, it has tripled since 2001, and I believe it has still much higher to go. It is for this reason every investor should build a core holding of gold bullion in their investment portfolios. I am also extremely excited about the silver and platinum bullion bars, in particular silver," he said.

Historically, South African investors have only been able to participate in the gold market by buying local gold shares and Krugerrands, and then more recently a gold Exchange Traded Fund (ETF) was introduced to the Johannesburg Stock Exchange (JSE).

"The problem with gold shares is that although they used to out-perform the gold price, in recent times, this is not the case. In fact, when the gold price ran from $700 to $1000 an ounce in 2007, most South African gold shares dropped in value. By owning bullion you are not dependent on the factors that influence the value of these shares," concludes Levenstein.

I-Net Bridge

Source : Evan Pickworth, http://business.iafrica.com/features/1959000.html notegolddiamond archives