Gold News

The central bank of Zimbabwe has increased the price of gold by a massive 757 per cent in order to cover rising production costs and curb smuggling, Thomson Financial reports.

Gideon Gono, the bank's governor, said: "With immediate effect, the support price has been increased from the current 350,000 Zimbabwe dollars per gram ($1,400 on the official market, but $2 on the parallel market) to three million Zimbabwe dollars per gram.

"As a country, our gold production levels have lately fallen victim to escalating costs as well as elements of indiscipline, sidemarketing and smuggling."

An economist said the previous price made no sense, but added that production of gold in the African country - which has fallen rapidly in recent months - is not likely to increase quickly.

"Despite the price review this does not mean production will suddenly increase since the gold mining industry does not have control in the supply of electricity," he said.

Low production levels have been blamed on factors such as a lack of vital materials such as cyanide, as well as people smuggling the yellow metal out of the country where it can be sold at a higher price.

The Zimbabwe Herald reported that three illegal gold dealers were arrested in Kadoma last week, after they were caught with around 270 grams of the metal.