Platinum Price Overtakes Gold Price

Todays top stocks to buyBack in October, I predicted that platinum prices would rise.

And now they have surpassed gold.

As of this writing, platinum prices have surpassed gold prices for the first time since March 2012, rising above $1,700 an ounce while gold remains at $1,680.

But what exactly caused this sudden surge, you ask?

Well actually, the writing was all over the wall…

South African Strikes Cripple Mining Companies

Over the last few months, a wave of deadly strikes have swept the South African mining sector leaving some 46 people dead and an industry in dire straits.

Now, the strikes are estimated to have cost the mining industry about 10.1 billion rand ($1.2 billion), according to the National Treasury.

And as a result, platinum prices finally overtook gold prices after news that the world’s top platinum producer, Anglo American Platinum (ticker: AAL), known as Amplats, said it will close four South African mines and cut some 14,000 jobs (which is 24% of its workforce).

As expected, the labor unions are in an uproar over this decision and now are threatening strikes across the board.  And the government is joining in as well.

But really, what did they think was going to happen?

I said it before, and I’ll say it again.

As noble as it is for labor unions to fight for higher wages and workers’ rights, the fact of the matter is businesses must make a profit in order to stay alive.

It doesn’t take an economics degree to see that.

To put it plainly, unions are like cartels.

They raise wages above competitive levels by restricting the supply of labor to various firms and industries.

Sure, they may win higher wages and better working conditions for their members, but they also force businesses to pay more for labor than they normally would.

When that happens, and companies start losing money to the tune of $1.2 billion… Sorry, but it’s time to pull the plug.

Amplats platinum mines around South Africa are dropping like flies.  This will cut platinum production by 400,000 ounces annually, to about 2.1 million to 2.3 million ounces.

A crunch in supplies will see prices rise.

Buy platinum now.

Yours-in-profits,
Todays top stocks to buy
John Holt
for Top Stock Millionaire

Similar Posts: