Most gold miners have succeeded in cutting production costs as a result of lower gold prices but appear to have ignored the real problem: increasing the demand for gold.
We now hear and see commercials promoting the use of steel. Steel? Yes, steel. We also see advertisements for oil and gas, even in this period of exorbitant prices. And, of course, there are the usual ads for forestry products, such as wood, paper, etc.
De Beers Consolidated Mines, which holds a virtual monopoly on the world diamond trade, spends 1% of its gross sales on advertising, and the company is increasing its advertising budget to 4% of gross sales. It’s expected that other diamond companies will match that amount.
Similarly, major gold producers should work to expand the World Gold Council, or a similar body, into a marketing tool for gold products, from the top down to the retail level.
The World Gold Council reports that demand for gold declined during the third quarter, and De Beers reports that there will be a shortage of diamonds next year, causing an upward pressure on diamond prices.
What will it take for the gold industry to realize it is time to learn how to sell?
Donald Cahill
St. Catharines, Ont.
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