Ghana – Kwaku Boham worries about the future. For years, he and his four fellow gold miners have scratched out a living on a tiny plot next to the roadside near Tarkwa in south-western Ghana.
All day in the tropical heat and humidity, they dig out the red soil and rocks and crush them in a noisy grinder, hoping to yield some small nuggets to cover their expenses and feed their families.
But they have no control over what they sell any nuggets for – that’s set in markets in New York and London. And over the past year, the price of gold has been falling.
On 1 January this year, the spot price of gold was $1,687.22 an ounce, this month it has been trading around $1,240 an ounce – a loss of around 25%. The outlook for 2014 is not much healthier. The reason gold is losing its lustre is that global economies are looking a lot healthier than they did a year ago.
The US economy grew by 3.6% in the third quarter of 2013, its best performance in 18 months, while unemployment, which hit a 26-year high at 10% in 2009, dropped to 7% last month – a five-year low.
While interest rates remain at historic lows, inflation has stayed subdued.
And fears about inflation next year have been further quelled by the prospect that the Federal Reserve may begin to taper off its bond-buying stimulus programme, quantitative easing.
All of which has been pushing the gold price down and is expected to do so for some time.
The global gold mining companies have been complaining of squeezed profit margins for some time, but while they will be able to weather the falling gold price, Kwaku Boham and his partners have no hedging strategies or cost-cutting options.
“These days all the prices fall down,” he says. “These days this job is not good, it’s not like the olden days.”
Dotted at intervals on the side of the road between the big mining towns of Obuasi and Tarkwa in Ghana are the cleaning sheds.
Little more than shacks, this is where Kwaku and his fellow workers bring the soil they’ve dug up for processing.
Kofi Osei runs one such cleaning shed and the methods he uses have barely changed in hundreds of years – he pans the soil with water and the heavier gold falls to the bottom.
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