The Goldsmiths–Part CXI

By R. D. Bradshaw, GoldSeek

One of the big news items these past few days is an intriguing article in the London Telegraph on Nov 11^th by Ambrose Evans-Pritchard on “Barrick shuts hedge book as world gold supply runs out.”  Drudge carried it as a major story on both Saturday and Sunday.  Obviously, if this report has merit, it could be earth shattering for the gold market in the coming days.  The prospects of the world gold supply running out must concern the gold manipulators who have spent decades suppressing the price of gold.

The basis of Evans-Pritchard’s report was remarks from Aaron Regent, president of the Canadian gold giant Barrick Mines.  Regent told the Telegraph that global gold output has been falling by about one million ounces per year since 2000.  As ore quality eroded, total mine supply dropped by ten percent.

The Problem

In a reference to current gold production, Regent said at a London gold conference that “There is a strong case to be made that we are already at ‘peak gold.’”  Regent noted that “It is increasingly difficult to find ore.”  The story added that “Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia.  South Africa’s output has halved since peaking in 1970.  The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday.”

The Evans-Pritchard story also took note of India’s recent purchase of IMF gold and reported that “China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor.  Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.  Gold exchange-traded funds (ETFs) – dubbed the ‘People’s Central Bank’ – have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany,France, and Italy.”

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