Gold

Gold is defined as a traditional hedge against economic uncertainty (the gold standard). 

Gold supply can be said quite unelastic as gold is quite difficult to find in commercial quantities and it takes time and money to bring a mine into production. From this point of view, the supply side of gold production seems relatively constant. 

Since 2007, Gold has increased in value largely as a result of economic uncertainty in the USA , and the subsequent decline of the value of the US $. Provided that countries with a high debt to GDP ratio, for example Greece, Spain, Ireland and Portugal, do not default on foreign payments, the decline in the US$ is likely to continue.

The recent improvement in the standard of living of a large number of citizenships of the Developed Countries (especially population from China and India) have created a new significant and sustainable market for gold, jewellery and ornaments as a status symbol and de facto wealth store.

The West African Gold Rush

During the last few years gold production in West Africa has highly increased by 53% and this region is generating a number of +1 Moz gold discoveries. West Africa has produced at about 175t of gold in 2008 and classified itself as the seventh biggest producer in the world (if rated as single entity). Basing on this, this region will possibly rank second (behind China) in the next 10 years.

Within West Africa, Ghana remains the biggest producer, whereas countries as Mali and Guinea have doubled their production. Burkina Faso, Ivory coast, Mauretania, Senegal, Niger, Sierra Leone and Nigeria are rising very fast in the gold sector (Ambrian).

As gold is a commodity sorted by investors in times of economic instability, its price will remain strong (basing on the market anticipation) and West Africa is seen as a promising gold producer for the next years, Vital can confirm that its investments and projects are carefully selected to act as a natural hedge against price volatility.