With the price of Gold banging along ever higher ceilings daily, two pieces of news caught our attention today, that individually either could be the catalyst of the lift-off to come and mark the start of the “real Gold rush”, but in combination on the same day..
The first, the announcement that Barrick Mining has closed it’s hedge book is hugely significant, as the massive amount of short-selling Gold that Barrick have done over the years has been a significant influence on holding the price of Gold down.
The fact that Barrick have had to admit defeat and close out of their short positions before they lose any more money as the price skyrockets, is as good an indication as you get from the industry, they know the price is going right up, they’ve bet the wrong way, and they’re cutting their losses sooner rather than later to get out..
As well as tacit admission that they know that prices are going to rise, it’s a doubly positive because they are part of the system that have endeavored to keep the prices down all this time..
And the other bit of news (same article) ..
World to Run out of Gold
Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.
“There is a strong case to be made that we are already at ‘peak gold’,” he told The Daily Telegraph at the RBC’s annual gold conference in London.
“Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore,” he said.
Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa’s output has halved since peaking in 1970.
Ok so translated, that means: -
The price is definitely going right up
Be quick or they’ll run out!!
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