Monday, November 25, 2013

ZeroHedge: Have We Reached 'Peak Gold'? GLD, MUX, TNR.v, GDX

   ZeroHedge presents Natural Resource Holdings Global 2013 Gold Mine & Deposit Ranking. The best medicine from the Low Gold prices is the Low Gold prices. Supply and Demand. On Supply side we have record high leverage at COMEX with 69 owners per 1 ounce of Gold, Majors closing mines and Juniors shelving the development at low Gold prices. On Demand side we have Central Banks buying and record amount of physical Gold flowing to China, India, Thailand and Turkey.

Rick Rule On Gold & Resources: "The Stage Is Set For An Absolutely Dramatic Recovery" TNR.v, MUX

 "As we can see now, all Majors are cutting the marginal production and shelving the project developments. The production cost price will determine the bottom in the particular commodity. While it is possible to experience the prolonged period of below the cost of production prices, it is not sustainable and it does not play very well with the FED talking about the tapering due to the economic growth. 
 All these drastic cost cutting and Major's "new CEO bottom preservation measures" will lead to the price reversal once the Demand will outstrip Supply. Normally this move is very impressive, as you can not put online new mines just by flipping the switch. The lead time in the industry is measured by years  and by billions of underinvested Capital in the Projects Pipeline."


Have We Reached 'Peak Gold'?

Led by countries such as Russia and China, central banks have recently become net buyers of gold. Meanwhile, ETF gold outflows have been a temporary source of supply this year, but obviously this cannot persist. It’s also unreasonable to assume that recycling will make up a significantly greater piece of supply without the price of gold increasing substantially.With the grade of current producing gold mines being 32.6% higher than undeveloped deposits, it makes the supply scenario even more clear. Not only is the current yearly mine supply difficult to sustain, but future mines coming online will be challenged by grade and margins to be economical at today’s prices. Mathematically, unless we have high-grade, high ounce deposits that are being fast tracked online, it will be very difficult to find a way to get supply to match demandHave we reached peak gold?"

China, India, Turkey and Thailand Buying Record Amount of Gold - What Do They Know The Others Don't? GLD, MUX, TNR.v, GDX

"These two charts present the big picture in Gold Supply and Demand the best. When Central Banks are distorting the markets by suppressing the Gold price the increased Demand is overwhelming the diminishing Supply. The Game of Musical Chairs in Fractional Reserve Gold System continues, but it is very close to its logical conclusion with COMEX deliverable Gold being leveraged of 59 times at least."

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