By Kishori Krishnan Exclusive to Gold Investing News

It’s very grim. Shedding its workforce at the fastest pace in 34 years, the US employment scene has become very grim. The tally of year-to-date lost jobs has now reached the 2 million figure. Not surprisingly, the number of homes in foreclosure neared 3 per cent in the third quarter after a 76 per cent rise. It did not take too long for various markets to slump following the release of the dismal US labor statistics. Oil traded at four-year lows under $42 per barrel, copper shed 6.36 per cent, and the gold price staged its own cave-in, shedding up to $25 and retreating to under the previously warned-about area of support for gold per ounce at $745, to touch $739.80, in the US market. New York gold futures fell sharply to close just above $750 an ounce, ending the week more than 8 per cent lower as the bleak US jobs report triggered wholesale liquidation of assets across the board. “Gold might be dragged down with other financial assets if the financial market heads for another major downward leg,” said Jeffrey Christian, managing director of CPM Group. He added: “Gold tends to be liquidated as investors needed cash when stocks decline sharply and because of deleveraging.” Noted Matt Zeman, a metals trader at LaSalle Futures Group in Chicago, “People don’t have faith in anything else but cash.” As the dollar climbed, gold fell further, eroding the appeal of the precious metal as an alternative investment. Silver also declined. Marty McNeill, a trader at R.F. Lafferty Inc. in New York told Bloomberg, “Gold has been moving with the stock market. Funds are needed to raise cash to protect other assets. Gold is one of the most liquid assets.”

On Hold

Australian miner OceanaGold (OGC.AX) has put on hold a $320-million gold and copper project in the Philippines due to funding difficulties amid global economic turmoil. “The uncertainty around current financial markets dictates that we effect this strategy,” Chief Executive Stephen Orr said in a statement. The company’s Didipio project is only the second mining venture run by a foreign firm in the Philippines. OceanaGold has had no success so far in getting a partner to help fund the additional $185 million needed for the mine project in the northern Nueva Vizcaya province to take off. Prospective partners were taking a very conservative approach because of the global credit crunch, and are “waiting for the storm to pass,” OceanaGold spokesman Darren Klinck said.

Gold Smugglers

Meanwhile, gold smugglers have laid siege to Zimbabwe’s small-scale gold miners, baiting producers with foreign currency as the Zimbabwe-denominated prices offered by Fidelity Printers and Refiners have increasingly become eroded by inflation. According to information gathered by Zimbabwe’s The Sunday Mail Business, the yellow metal is fetching 200 rand or US$20 per gram, compared to an estimated $800,000 per gram being offered by the Reserve Bank of Zimbabwe. Cash shortages plaguing the country were also affecting payment and deliveries to and by the miners. Most of the gold that is being purchased outside the formal system is destined for regional countries such as South Africa, Mozambique and Zambia, the report said.

Death At The Mines

A miner working at the Australian-owned White Mountain gold mine in northeastern China died on Thursday night, the mine’s owner Sino Gold said. The miner was an employee of Sino Gold’s underground mining contractor, it said in a statement to the Australian stock exchange. China’s mining industry is the world’s deadliest, with an average of nearly nine miners a day dying in the first 10 months of 2008. Domestically owned coal mines account for the vast majority of fatalities. Sino Gold (SGX.AX) HK celebrated its first gold pour at White Mountain in late October. It also operates a gold mine in Guizhou province, in southern China.

The world’s biggest gold producer Barrick Gold Corp. (ABX.TO), said 10 people died after a mudslide swept over an exploration camp near its Kainantu mine in Papua New Guinea on Dec. 4. Celina Watt, a spokeswoman for the Toronto-based company, told Bloomberg the fatalities included five local villagers and five employees of Barrick.

Barrick acquired the Kainantu gold mine and exploration assets for $141.5 million last year from junior gold company Highlands Pacific Ltd. About 40 people are still missing after the mudslide.

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