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Monday, November 3, 2014

Reuters - gold price near tipping point article from a month ago


Reuters - gold price was near tipping point for mine closures $80 ago. Reuters reporter Nicole Zesty-Mordant reminds us of this little thing called supply and demand:
To be sure, some in an industry known for its optimism see a proverbial silver lining: they believe that a sharp drop in production will help to lift prices.

While gold is also a financial asset that can benefit from uncertainty and inflation fears, some investors and executives say less supply cannot help but put a floor under bullion.

Miners will remain loathe to invest in new projects at gold prices below $1,500, said Douglas Groh, a portfolio manager at Tocqueville Asset Management.

"Two years from now end-2016, 2017 and even into 2018, the markets will recognize that there isn't new capacity coming on stream ... Certainly the gold price will jump," Groh said.

For Goldcorp CEO Chuck Jeannes, the industry is close to "peak gold," an expression that means production is at its all-time high as deposits get harder to find as existing production gets mined out.

"I don't think that we will ever mine as much gold as we do in 2015. That's positive for the gold price," he said in an interview.

Of course gold can keep falling for as long as Whitey keeps selling GLD and futures.

But once the last white-ass cracker from Manhattan has puked his last ounce of gold, the price will go up.

That's my prediction.

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