Peak Gold Globally – “Bullish For Gold”

Peak gold production is happening globally and this is “bullish for gold” according to a slowly emerging group in the gold industry. It is great to see the reality of peak gold production slowly be acknowledged in the mainstream as it is an important fundamental factor in the market which has been continuously ignored.

As reported by Bloomberg in ‘Decade of Gold Mine Declines Poised to Spur Deals, Prices’ today:

Gold’s dwindling pipeline of new mines is poised to usher in a decade-long output slump, spurring prices and delivering a new impetus for dealmaking and industry consolidation, according to Goldcorp Inc., the third-largest gold producer.

Mine supply may fall about a third in the 10 years to 2025, according to Bloomberg calculations based on forecasts from BMO Capital Markets and Randgold Resources Ltd. The number of newly discovered primary gold deposits fell to three in 2014, from a peak of 37 in 1987, according to Melbourne-based industry adviser MinEx Consulting Pty.

Gold production may peak in the next three years as miners fail to replace their reserves, Randgold’s Chief Executive Officer Mark Bristow said in September. And, according to Goldcorp’s Telfer, producers have limited scope to raise output in response to higher prices. “We are having a heck of a time finding gold,” he said.

The metal is up 16 percent this year, rebounding from three straight annual declines. Gold may average $1,500 an ounce by 2020, according to an August note from BMI Research.

“Once supply from mines starts to decline and people start to realize the impact that’s going to have, I think it’s going to be incredibly bullish for gold,” Telfer said in the interview last week in Melbourne. “If gold went to $2,500 an ounce tomorrow, Goldcorp’s production wouldn’t change for the next four years. It can’t react to a change.”

‘Peak Gold’ is happening which has important ramifications for gold prices and is why we were one of the first analysts in the industry to consider the peak gold phenomenon back in 2007 and 2008. Even Goldman Sachs now acknowledges the importance of peak gold to the gold market. It is another long term positive fundamental for the market and will support prices and could contribute to much higher prices in the coming volatile and uncertain years.

Gold and Silver Bullion – News and Commentary

Gold rises as U.S. dollar pares gains (Reuters.com)

Gold prices log first gain in 7 sessions (MarketWatch.com)

Gold rebounds on Trump policy uncertainty (CNBC.com)

Global bonds slump as Trump prompts inflation fears (TheGuardian.com)

Demonetisation impact: $1 billion worth of gold imported so far since Nov 9 (Business-Standard.com)

Hugh Hendry is betting on an EU breakup and a ‘very high’ probability Marine Le Pen will be French president (BusinessInsider.com)

Trump carnage in bonds spells trouble for stocks (MarketWatch.com)

Why interest rates will likely rise faster than inflation (CBSNews.com)

James Turk – What Donald Trump Faces Is Very Different From What Ronald Reagan Faced, Expect Major Market Moves… (KingWorldNews.com)

President Trump: How America Got It So Wrong (RollingStone.com)


Gold Prices (LBMA AM)

16 Nov: USD 1,225.70, GBP 9,984.36 & EUR 1,144.68 per ounce
15 Nov: USD 1,228.90, GBP 998.86 & EUR 1,138.70 per ounce
14 Nov: USD 1,222.60, GBP 997.80 & EUR 1,136.53 per ounce
11 Nov: USD 1,255.65, GBP 999.19 & EUR 1,154.45 per ounce
10 Nov: USD 1,280.90, GBP 1,034.07 & EUR 1,175.48 per ounce
09 Nov: USD 1,304.55, GBP 1,050.42 & EUR 1,176.84 per ounce
08 Nov: USD 1,284.00, GBP 1,034.26 & EUR 1,162.02 per ounce

Silver Prices (LBMA)

16 Nov: USD 16.95, GBP 13.64 & EUR 15.85 per ounce
15 Nov: USD 17.00, GBP 13.68 & EUR 15.80 per ounce
14 Nov: USD 17.20, GBP 13.73 & EUR 15.95 per ounce
11 Nov: USD 18.59, GBP 14.73 & EUR 17.09 per ounce
10 Nov: USD 18.75, GBP 15.11 & EUR 17.20 per ounce
09 Nov: USD 18.81, GBP 15.12 & EUR 16.96 per ounce
08 Nov: USD 18.26, GBP 14.72 & EUR 16.54 per ounce

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Mark O'Byrne
Executive Director