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Important Factors Impacting The Gold & Silver Supply And Price

May 13, 2020

Important Factors Impacting The Gold & Silver Supply And Price

The majority of analysts still don’t understand that gold and silver are based on two different price or value functions.  To understand the future forecasts for precious metals, investors need to the difference between the two value functions.

In my newest video update, Important Factors Impacting Gold & Silver Price And Supply, I discuss in detail the two different price functions and why the current commodity-based mechanism differs from the precious metals “Store of Value.”

In the video, I explain why the “commodity-priced mechanism” is important as a floor for the gold and silver prices.  Unfortunately, because Harry Dent doesn’t understand this mechanism, he continues to put out faulty and incorrect analysis on the gold price.  Dent stated in his April 13th video update that during the next deflationary collapse of the markets, gold would head back down to $900-$1,000 or the lows of 2008 at $700.

Dent’s gold forecasts continue to be wrong because he fails to incorporate the impact of “ENERGY” and the “COST OF PRODUCTION” on the gold mining industry.

I updated Barrick and Newmont’s combined total production cost versus the gold price for Q1 2020, and was quite surprised.  Again, I explain why I don’t see gold heading anywhere near $700 due to the significant increase in cost to produce the yellow metal since 2006 when gold was the same price.

This video took longer to publish then I had planned due to the research.  I was quite surprised to see Barrick and Newmont’s total production cost rise to nearly $1,400 an ounce for Q1 2020 versus the $1,272 average for 2012, when oil prices were over $100 a barrel.

…click on the above link to read the rest of the article…

Peak Gold: Global Gold Supply Flat In 2017 As China Output Falls By 9%

February 8, 2018

Peak Gold: Global Gold Supply Flat In 2017 As China Output Falls By 9%

– China gold production falls by 9% to 420.5t in 2017
– Chinese gold demand rose 4% to 953.3t in same period
– China is largest producer and accounts for 15% of global gold production
– China does not export gold. Increasing foreign gold acquisitions to meet demand
– Global gold production flat – 3,269t in ’17 from 3,263t in ’16, smallest increase since ’08
– Peak Gold is here: supply set to fall gradually while global demand remains robust

Financial markets are abuzz with how much money the global economy lost earlier this week when the Dow Jones Index had a bit of a crash – ahem – ‘correction’. Luckily it has (temporarily at least) recovered but there are many other threats to financial markets in 2018 that suggest the ‘Everything Bubble’ is set to burst.

There is also an unappreciated threat to the gold market and more particularly a threat to gold mining supply and therefore the likelihood of higher gold prices – that is the threat of ‘peak gold’.

The supply of gold increased last year by the smallest margin since 2008. Ourselves and other market experts who have looked at the data, have been contending for many months now that we are on the cusp of ‘peak gold’.

The FT has now recognised the phenomenon of peak gold or ‘plateau gold’ and covered it this week: Global gold mine supply plateaued in 2017 as China output fell 9%.

China is the world’s largest gold supplier. In 2016 the country produced 453t or 56% more than the second highest gold producing nation of Australia.In 2017 Chinese production fell 9% to just 420.5t.

It also leads global gold demand. The demand comes from not only individuals but also a central bank that is determined to no longer rely on the US dollar.

…click on the above link to read the rest of the article…

Global Gold Investment Demand To Overwhelm Supply During Next Market Crash

November 13, 2017

Global Gold Investment Demand To Overwhelm Supply During Next Market Crash

When the next market crash occurs, global gold investment demand will likely overwhelm supply.  When this occurs, we could finally see the gold price surpass its previous high of $1,900.  Now, this isn’t mere speculation, as we already have seen this taking place in the past.  When the broader markets crashed to the lows in Q1 2009 and the 10% correction in Q1 in 2016, these periods were to two highest quarters of Gold ETF investment demand.

I don’t really care on whether the physical gold is actually in the Gold ETF’s, rather I like to look at it as an important indicator that shows us how much investor fear there is in the market.  Moreover, with the amount of leverage and debt now in the system, when the market crashes this time around, it will push gold investment demand up to a record we have never seen before.

The chart below shows the amount of physical global gold investment demand over the past 14 years.  As the gold price increased, so did amount of gold bar and coin demand:

As we can see, during the U.S. Banking and Housing Market crash in 2008, gold bar and coin demand doubled to 868 metric tons (mt), up from 434 mt in 2007.  That was quite a lot of gold bar and coin demand as it totaled nearly 28 million oz (1 metric ton = 32,150 oz).  Furthermore, as the gold price jumped to $1,571 in 2011, gold bar and coin demand shot up to nearly 1,500 mt (48 million oz).

Now, the reason for the huge spike in physical gold investment in 2013 was due to the huge price smash as the gold price fell from nearly $1,700 in the beginning of the year to a low of $1,380 by the middle of April.  Investors thought this was a huge sale on gold so demand for bars and coins reached a new record of 1,716 mt.

…click on the above link to read the rest of the article…

BREAKING: China – World’s Largest Gold Producer Mine Supply Plummets 10%

October 30, 2017

BREAKING: China – World’s Largest Gold Producer Mine Supply Plummets 10%

The world’s top gold producer saw its mine supply plummet by 10% in the first half of 2017.  According to the GFMS World Gold Survey newest update, China’s gold production in 1H 2017 fell the most in over a decade.  The fall in Chinese gold production is quite significant as the country will have to increase its imports to make up the shortfall in its mine supply

The data in the GFMS 2017 Q3 Gold Survey Update & Outlook reported that Chinese gold mine supply declined 23 metric tons to 207 metric tons in the 1H 2017 versus the 230 metric tons during the same period last year:

The report stated the reason for the decline in Chinese gold production was due to the government’s increased efforts to curb pollution as well as heightened awareness of environmental protection.  Furthermore, GFMS analysts forecast that Chinese gold production will continue to deteriorate for the remainder of the year as production is scaled down.

This is undoubtedly bad news for a country that is not only the world’s largest gold producer but also because China consumes all of its domestic mine supply.  To get an idea just how far China is ahead of the rest of the pack, take a look at the following chart:

Last year, Chinese gold mine supply of 454 metric tons (mt), was 56% higher than second-ranked Austraila at 291 mt.  These eight top gold mining countries produced 56% of the total world’s supply of 3,222 mt in 2016.  Lastly, you will notice that South Africa came in last place at 150 mt.  However, South Africa was the leading gold supplier in the world in 1970, when it produced a staggering 1,000 mt:

…click on the above link to read the rest of the article…

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