Thursday, April 25, 2019

Australian Gold Mine Production on Track to Fall By Half Over Next 25 Years

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by Peter Schiff, Schiff Gold:

Australian gold output will peak in just four years and then begin a steep decline, according to a report issued by a Melbourne-based industry adviser.

According to MinEx Consulting analysis reported by Bloomberg Business, Australian mine output will max out in 2021 and then fall by half into the mid-2050s, as aging mines close down.

A steep decline in Australia’s gold production will have a significant impact on world supply and lends credence to remarks made by the chairman of the World Gold Council during an interview at the Denver Gold Forum last month.

Randall Oliphant said he thinks the world may have reached peak gold. This means the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s. Oliphant said there are signs we’ve reached that point. In the near-term, he expects production to likely plateau at best, before slowly declining as demand rises, especially given global political risks and robust purchases by consumers in India and China

We’re not going to fall off a cliff in the near term, but in the same time it’s really hard to see how we’re going to produce enough gold to meet all this demand.”

Australia ranks as the world’s second-largest producer of gold. A steep falloff in production there would certainly push overall world output significantly lower, lending weight to peak gold speculations.

Recent production data also backs up the contention the world may have hit peak gold.  Mine production plateaued at 3,100 tons in 2016, equal to 2015’s output. And in the first half of this year, we saw sharp drops in mine output in both China and Australia, the world’s leading producers.

In 2016, Mining.com analyzed the data and concluded there are no more easy gold discoveries. In fact, the number of major gold discoveries continues to shrink. MarketWatch asserted that we’re heading for “an impending gold production cliff.” This seems to be the major issue facing Australian miners. According to Bloomberg Business, a steep drop in new discoveries as aging mines reach the end of their life is the key factor behind the predicted production dip.

The nation needs to act to boost future production from new discoveries, or risk ‘significant supply disruption in the medium-term,’ MinEx managing director Richard Schodde said in a study published Monday.”

Read More @ SchiffGold.com

Jim Willie: Interview with Mark O’Byrne -GoldCore (2/14/19)

from The Gadfly:

Mark O’Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.

Click HERE to listen

Read More @ TheGadfly.com

Peak Gold? South Africa Mines Could Be Out of Gold in 39 Years

by Peter Schiff. SchiffGold:

South Africa may run out of gold within four decades, according to the Environmental Economic Accounts Compendium published by African Statistics Day.

Analysts say that at current production levels, South Africa has only 39 years of accessible gold reserves remaining. This is significant considering South Africa ranks as the number five gold producing country in the world, and could be another sign the world is approaching, or has reached “peak gold.”

Peak gold is the point where the amount of gold mined out of the earth will begin to shrink every year, rather than increase, as it has done pretty consistently since the 1970s. During the Denver Gold Forum last September, the World Gold Council chairman said he thinks the world may have already reached that point. And he’s not the only one. Franco-Nevada chairman Pierre Lassonde also expects a significant dip in gold production in the coming years. During an interview with the  German financial newspaper Finanz und Wirtschaft last fall, Lassonde said we’re seeing a significant slowdown in the number of large deposits being discovered.

The big question is how will the industry replace the massive gold mines that have produced large amounts of the yellow metal over the last 130 years or so?

The situation is particularly acute in South Africa.

As a Business Insider article pointed out, large goldfields such as South Africa’s Witwatersrand Basin are nearing the end of their life cycles. More than 40% of all the gold mined in human history came from the Witwatersrand Basin. But annual gold output in South Africa has plummetted. In 1970, South African mines produced 1,000 tons of gold. Since then, production has steadily dropped. The country only produced 167.1 tons in 2016. That represents an 83% drop from the 1970 peak.

The fact they have already dug out most of the easy to reach gold represents one of the biggest challenges facing South African miners. As mining analyst Kobus Neil told MoneyWeb, the deeper the mines go, the further the miner has to travel, which comes with additional costs and safety concerns.

As you dig deeper into the ground, you need a higher gold price to make those resources economical, if there isn’t a favorable gold price, those resources can’t be mined economically.”

Even with gold prices rising, mining companies are having a difficult time coving the higher cost of mining the harder to reach, lower quality deposits of gold left in the earth.

“We continue to try and manage costs in order to ensure the sustainability of the operations. Given the above-inflation increases in wages (approximately 50% of operating costs) and electricity prices (approximately 20% of operating costs), this has been a challenge,” Senior vice president at Sibanye-Stillwater James Wellsted told MoneyWeb.

Read More @ SchiffGold.com

GOLD HOLDERS – CENTENNIAL OPPORTUNITY

by Egon Von Greyerz, Gold Switzerland:

Strategic investments are made for the long run and with no intent of short term gains or concern of short term fluctuations. This kind of investing is based on buying undervalued and unloved assets and holding them for a very long term. This is what we did with gold in early 2002 for our investors and ourselves.

Having come down from $850 in 1980, not only did gold represent incredible value at $300 in 2002, but it was also the best insurance possible against a financial system which was turning increasingly unsound. Sixteen years later we are still sitting on our gold. We have seen a high of $1,920 in 2011 and a low of $1,050 in 2015. Have we ever been tempted to sell the gold? No, not for one second. We would rather buy more than sell an ounce.

Demand for Physical Gold Up, Supply Down in First Half of 2017

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by Peter Schiff, Schiff Gold: It’s easy to get caught up in what the Fed will do next, or the latest political brouhaha in Washington D.C. And of course, this stuff matters. But when it comes to gold, you should never lose sight of fundamentals.
Nothing is more fundamental than supply and demand. Based on the GFMS Gold Survey 2017 H1 Update Outlook, the fundamentals for gold are trending in a positive direction. Demand is pushing upward, while supply is falling.

Demand for physical gold rose to 1,895 tons in the first half of 2017, a 17{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} increase over the same period last year.

Comparing the first and second quarter of this year also reveals an upward trend. Demand climbed in Q2 2017 to 957 tons. That was up from 938 tons in Q1, a 2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} increase.

Meanwhile, total supply dropped 5{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} in the first half of the year. Mine output was stagnant, falling by 0.2{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528}. Production dropped precipitously in China and Australia, the world’s number one and number two producers. The amount of scrap gold also fell, helping to drive the decline in supply.

In many ways, the demand increase signals a return to normalcy after a tumultuous 2016.

After the rollercoaster ride of events for the gold market in 2016, from a jewelers’ strike to Brexit to Trump to demonetization, 2017 has avoided similar dramatic events in the first half, at least from a gold perspective with far right candidates seeing little success in a range of European countries. Indeed the first half of this year has arguably been more of a reversion to normality across much of the gold market, with neither the highs (of ETF demand) or lows (of truly pitiful Asian demand) that were recorded in the first half of 2016 being repeated.”

While the trends are positive, demand still hasn’t returned to 2015 levels. Despite falling supply, there was a market surplus of 138 tons in the first six months of this year, compared to a balanced market during the same period of 2016.

Indian demand was a big factor in pushing global demand higher. Gold imports into the country have already topped the total for all of 2016. Indian gold demand in Q2 surged by 126{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-on-year. Demand for gold in India hit the highest level in the last six quarters. India imported 272 tons of gold in Q2 2017, up from 78 tons in the same period last year.

While Indians rushed to buy gold, Americans sat on the sidelines. Investment in physical gold in the US plunged 40{5f621241b214ad2ec6cd4f506191303eb2f57539ef282de243c880c2b328a528} year-on-year, falling to 18.5 tons.

This staggering decline was mainly driven by a generally weak investment appetite for gold combined with very low coin fabrication.”

Read More @ SchiffGold.com

This Myth About Gold Could Be Costing You Serious Money

by Justin Spittler, Casey Research:

Forget what you know about interest rates and gold.

…Specifically the idea that high rates hurt gold.

That’s a myth… one that could cost you serious money in the months ahead.

More on that in a second. But first, let me tell you why many investors believe high interest rates are bad for gold. It’s a simple idea really.

Trump’s Trade War Dilemma And Gold

by Dave Kranzler, Investment Research Dynamics:

If the “risk on/risk off” stock market meme was absurd, its derivative – the “trade war on/trade war off” meme – is idiotic.  Over the last several weeks, the stock market has gyrated around media sound bytes, typically dropped by Trump,  Larry Kudlow or China,  which are suggestive of the degree to which Trump and China are willing to negotiate a trade war settlement.

Please do not make the mistake of believing that the fate the of the stock market hinges on whether or not Trump and China reach some type of trade deal.  The “trade war” is a “symptom” of an insanely overvalued stock market resting on a foundation of collapsing economic and financial fundamentals.  The trade war is the stock market’s “assassination of Archduke Franz Ferdinand.”