Akwesi Boahene’s gold dreams ended better than those of some people in Dunkwa-on-Offin, Ghana, whose riverbeds yield flecks of the precious metal to pickaxes. He still had his life.
Boahene, a satellite-television installer, and a partner pooled $10,000 two years ago to rent land and start a mining operation in a muddy West African town then booming with prospectors lured by what was gold’s longest bull market in at least nine decades.
In May, as prices sagged, his venture became another victim in a year of lost faith in the metal. Boahene shut down the no- longer-profitable business and told his 15 workers to stay home. When a former employee phoned one morning in June about returning to work, Boahene, 33, had no good news.
“I have asked you to give me some time, I am still trying to raise money before we can resume,” he said, lying in the shade outside his rented one-room house.
After enjoying a heyday from gold’s boom, the community faces a stark reversal of fortune that’s playing out in joblessness and an unusual crime spike. The news reverberating through the town of 33,000 that week: the deaths of two unemployed miners, shot during attempted thefts.
Gold’s swift fall, including two days in April when it plunged the most since 1980, has ravaged hopes and livelihoods around the world -- from the 1 million miners in Ghana who scour in the dirt, to thousands of executives and geologists at mining exploration firms that are running out of cash in Vancouver. Gone too are jobs for auditors, bankers and analysts in the finance capitals of Toronto and London. Investors who bet big and lost are shifting assets elsewhere and scaling back retirement plans.
Sevenfold Gain
During a 12-year bull market, the metal was promoted as a hedge against inflation, a store of value and a spectacular investment in its own right, gaining more than sevenfold. Its rise resembled historic moves like the Internet stock bubble of 1999-2000.
The fall may end badly, too.
“The gigantic, decade-long rally I don’t think will be repeated, at least in my lifetime,” said Michael Aronstein, 60, president of Marketfield Asset Management LLC, which manages more than $13 billion in New York. Aronstein predicted the 2008 slump in commodities prices and the 2009 rebound.