Gold Fields Ltd. (GFI) fired 8,500 workers at a South African mine operated by the fourth-biggest producer of the metal after they failed to heed an ultimatum to abandon a strike and employers, and unions sought to reach a deal on pay.

Workers dismissed from the KDC East mine may appeal, Willie Jacobsz, a spokesman for Gold Fields, said today by phone.

A spate of strikes that began in the platinum industry and spread to gold, chrome and iron-ore operations have hurt South African companies already grappling with rising costs and helped push up international prices for precious metals. Workers have walked out without heeding unions or laws on resolving disputes, prompting producers to issue threats to dismiss employees.

AngloGold Ashanti Ltd. (ANG), the biggest African producer of the metal, has issued a "final call" for all striking workers to return to their duties by midday tomorrow. Those who don't will be fired, the company said yesterday in a statement.

AngloGold, which gets about a third of its production from South Africa, shut all of its sites in the country last month.

The company and its peers improved a wage offer last week after unauthorized stoppages led to about a 40 percent drop in the nation's gold operations, hurting Africa's biggest economy.

Strikes at AngloGold have entered their fifth week, with the company losing about 32,000 ounces a week, Chief Executive Officer Mark Cutifani said on a call with investors yesterday. Before the unrest, the company had expected to reduce the size of some mines within five years as resources were depleted, according to the CEO, who said that "areas that were marginal in the first place will be under extra scrutiny."

David Fuller's view I assume that more agreements between mining companies and striking mine workers in South Africa will be reached and that they return to work. Nevertheless, these incidents highlight the difficulty and cost of extracting a relatively scarce metal from mines which are often very deep in the ground. I doubt that these factors are fully discounted at today's prices for gold.

I am annoyed with myself for holding too much gold near its recent highs, when it encountered resistance where I thought it might, near the two previous rally highs and the psychological $1800 level. I was trying to squeeze out a little more profit before it fell back temporarily.

Today, I think gold (monthly, weekly & daily) has reached an interesting level near $1700 and it shows a short-term oversold condition on Stochastics readings. Nevertheless it will take a clear upward dynamic to suggest that recent selling is giving way to renewed demand.

Meanwhile, setbacks of this magnitude are not uncommon within gold's previous advances, as you can see from the charts above. The US stock market has been a headwind for gold recently but low interest rates are supportive of bullion. I expect the yellow metal to resume its rally in coming weeks, prior to new all-time highs in 2013.