Andrew Pollard: Central Banks Will Drive Gold Higher in 2020

We have been following central bank gold acquisitions for the past several years as this is one of the major indicators as well as biggest drives of demand for gold. Central bank gold acquisitions have been in a state of change for the past two years and we are now seeing massive acceleration of acquisitions along with a variety of new central banks getting in the gold market.

Central banks have been buying nearly 20% of the world’s gold supply, approaching the highest levels since the Nixon era, compared with being net sellers from 1971 through 2010: Bloomberg Intelligence’s @mikemcglone11 pic.twitter.com/akT70puDRL

— Lisa Abramowicz (@lisaabramowicz1) December 6, 2019

Central bank gold demand officially hit a new multi-decade record and although purchases have slowed recently, one market analysts expects that demand to continue.

In a report published Monday, independent commodity analyst Matthew Turner, noted that central bank gold purchases totaled 550 tons as of October, up 17 tons from total purchases in 2018, which saw the biggest gold buying spree in 50 years.

Turner noted that the gold market benefited from a frenzy of central bank activity at the start of the year as 390 tons were purchased in the first half of 2019. In the second half, the pace has fallen to 160 tons so far.

Slowing purchases out of Russia and China have impacted the global numbers, Turner noted. The Russian central bank has been reducing its gold purchases in an attempt to encourage domestic producers to export their gold, he added. Source

All of this comes at time when gold mining is falling off a cliff. We have witnessed two major mergers that happened in the early part of 2019. This has the potential to change the gold mining landscape forever. Gold mining operations have not focused on developing new mines and instead have focused on acquiring existing mines. This is sea change from the past. This, in our opinion, signals a major shift in how gold mines are developed and the number of new mines that are developed to the point of being profitable. We believe the major mining companies, like Barrick, are their last leg and within the next 15-20 years these so-called major mining companies will all be gone replaced by smaller, more agile companies that can raise the necessary capital and bring the gold home!

What this means to mining – everything. Junior exploration companies that are currently well capitalized and have proven ounces in the ground are sitting in a great position. These companies have the potential to create enormous amounts of wealth for share holders and others that invest in the early stages of development. Blackrock Gold is just such a company. With a great management Team, that CEO and Director Andrew Pollard, is helping to lead, the company is sitting on 157.7 grams of gold per ton in the Nevada desert. This makes his Team and company very attractive to the major gold mining companies.

I sat down with Mr. Pollard to discuss how the changes in central banks acquisition appetite will impact the mining industry. The two go hand-in-hand as the central banks demand more and more large quantities of physical gold.

This paints a truly detailed image of what is happening in the gold market. The volume of articles surrounding Barrick, NewMont, Rand Gold and GoldCorp alone shows the importance of this event to the gold market – click here for an idea of how was written about these two events. These are some of the largest gold mining operations in the world and now they have begun showing stress and strain in their ability to produce the necessary volume of gold to satisfy central bank demand.