Iron ore prices surged 19% on March 4, the highest jump for the mineral in memory.
Some analysts see this as the last gasp of a speculative romance for iron ore While others say China’s recent decision to increase steel output, even in face of that country’s slowing economy, has caused the spike. Bloomberg called the iron ore market as going “berserk” last Friday with the single biggest one-day jump since the news organization began tracking iron ore prices. However, most agree that while the increase was impressive, sales data indicate that iron ore’s recent high price will be short-lived. However, if it continues the main beneficiaries in Africa will be Guinea Conakry and other ore-rich countries.
Meantime, gold’s future seems rosier than iron ore. Since November 2015, gold prices appear to have broken the 2014-15 slide of the precious metal; in fact, gold future prices for April delivery price reached more than $1,280 per ounce, the highest price in more than a year. Why? Gold’s history as a ‘safe-haven’ asset indicates buyers are still unsure about Europe’s economic recovery and concerned about crises around the world, including ISIS’s growth and a pause in the Fed’s increasing the U.S. interest rate. Curiously, gold’s higher price comes in a period when the U.S. dollar is stronger against world currencies. In Sub-Saharan Africa, South Africa stands to benefit the most from an increasing pricing for gold. Other mining countries — Burkina Faso and Mali — will also see gains, even if the AQIM terrorist threat hangs as a shadow over West Africa. Another economic lift for the three countries’ economies is the sustained, low price of petroleum. South Africa, Burkina Faso, and Mali are all net oil importing countries.