Languishing gold prices could get some help as miners in South Africa enter wage negotiations with the industry’s labor unions. But it’s unclear how much difference even a significant strike will mean to prices. South Africa, at one time the world’s top gold producer, is no longer the heavyweight it once was, but it remains a major player. Unions representing more than 80% of the country’s gold workers are demanding as much as double their current wages in negotiations that began June 22. Industry watchers predict the two unions will settle for much less but not before striking and reducing the country’s gold output. The potential for such an event could edge gold prices higher in weeks ahead. Wage discussions in the gold sector...are likely to be difficult, with a strike a distinct possibility,� Barclays said in a note. Reduced supplies may spark a rise in the price of gold—and the futures market has a lot of room to move higher. Gold prices tumbled 29% from the start of 2013 to the end of 2014, a selloff driven largely by the Federal Reserve’s exit from its post-financial-crisis stimulus measures and expectations for higher interest rates. Although gold prices inched higher in May, they remain near 4½-year lows. The most actively traded gold contract, for August delivery, ended at $1,173.20 a troy ounce Friday on the Comex division of the New York Mercantile Exchange—that’s down almost 40% from gold’s 2011 highs near $1,900 an ounce. And to be sure, gold demand remains tepid due to head winds from a stronger dollar. Gold is priced in dollars, and as the greenback strengthens, gold becomes more expensive for investors who use other currencies. It’s also likely that the Federal Reserve will raise interest rates for the first time in a decade later this year, a move that would boost the dollar and other yield-bearing assets while reducing demand for gold.

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