goldcore.com / By Chris Sanders / December 10, 2012
But there is another reason why gold remains attractive, and that is simply that it, too, is a depleting resource and a unique one. The once dominant role of South Africa has declined significantly with gold production having peaked in the 1970’s and falling sharply ever since. Other producers such as China have developed to fill the gap between supply and demand – but there are question marks over some of the figures coming out of China. Despite the increase in Chinese production, world gold production has been slow to respond while the gold price has risen.
This is a physical problem as much as a financial one. The rising energy price of primary energy production translates into much higher energy costs for miners.
They are being forced to extract and separate increasingly hard-to-get and dilute fractions of ore. This raises serious questions about the outlook for their long term profitability. Increasingly, production is a by-product of mining for other minerals from increasingly dilute fractions of gold.
None of this, though, seems to bother the navigators of our ship, who are stubbornly steering us farther from care than danger on a course across an ocean of debt to follow the great white whale of business as usual. These are interesting times alright, and historically interesting times have been the best times to own real, tangible, physical gold.
Somewhere, of course, where the navigators can’t steal it.
Recent Comments