As we have pointed out over the past month gold mining production is/has collapsed. Yes, there is plenty of gold still being mined, however, you need a major discovery to really fuel the market. We stated, just last week, with the discovery of 5 million ounces of gold, at the Springpole Project in Canada, we would need 10-15 more of this size project to keep up with demand over the next decade. According to Ian Telfer, Chairman of GoldCorp, they don’t exist.
Ian Telfer, chairman of Goldcorp Inc., is the latest industry magnate to predict the world has reached “peak gold,” saying that from here on out, mine production will continue to decline because all the major deposits have been discovered.
“If I could give one sentence about the gold mining business … it’s that in my life, gold produced from mines has gone up pretty steadily for 40 years,” said Telfer. “Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down.”
“We’re right at peak gold here,” he added.
Although gold prices sank two per cent to US$1,289.86 per ounce this week, sliding below the psychologically significant US$1,300 mark for the first time this year, Telfer said that day that he remained “bullish” and predicted gold prices would surpass US$1,500 or US$1,600 per ounce before the end of the year. Source – Business.Financial Post
This should be part of the fuel of the fire that sends both gold and silver to much higher benchmarks over the next 3-5 years. Once the “big money” managers, hedge fund managers and high net worth individuals see a full deterioration of mining output they will begin coming into the market in earnest. This should fuel a move into the juniors as it will then be impossible for their worth to be overlooked any longer. This is way we are making moves today instead of waiting for the rush.
The notion raised by Telfer that the world has hit maximum gold production, or peak gold, is gaining popularity. Last September, the chairman of the World Gold Council, Randall Oliphant, made a similar prediction, echoing what some industry leaders have been saying for years.
According to the WGC, which advocates for the gold industry and compiles research, annual gold production from mines has been increasing, albeit incrementally, from 2,744 metric tons in 2010 to 3,298 in 2017. Last year’s production represented less than a one per cent year over year increase from the 3,274 metric tons produced in 2016.
Source – Business.Financial Post
If we haven’t reached “peak gold” we are most certainly racing toward the summit. According to the chart above mining production has barely moved. The average over the span of this chart is approximately 4,439 tons annually, which just happens to match the last year reported, and is equal to approximately a tiny 125 ton “peak” above the 2010 level of 4,315 tons. The good news is, production is only slightly down from the 3% average annual growth of mine supply – still down, but appears to be within the margin of error.
Have we reached peak gold; does it matter? Is gold still part of our monetary system? If gold and silver are of no value, nor part of the monetary system and are only important for jewelry and industry then why does every “financial” TV network, that utilizes a ticker across the screen, single out gold and silver with their own square and talking points every business day? Why wouldn’t these bastions of financial knowledge highlight the “stock of the day” or use that square, and air time, to report something of real meaning and real value? Why? Because gold and silver are vital instruments in the monetary system – always have been, always will be.
Peak gold has been in the news cycle for a month or more which means someone is very concerned about gold mining production.
