While global prices for gold hit a new record high in May, the potential benefits for manufacturers and miners are being rapidly eroded by the collapse of the Zimbabwean dollar.

Instead the mining firms are nervously waiting to see if Zimbabwean President Robert Mugabe carries out his threats to nationalise companies that he says are allowing precious metals to be smuggled out of the country as part of a Western inspired plot to topple his beleaguered regime.

"It's like a vicious circle as we are not benefiting from these high international prices," said Mark Verden, chief executive officer of the Zimbabwe Chamber of Mines.