“Traders warn that speculative length in gold is high and there is potential for a short-term correction,” said analysts at Action Economics. Or in other words, some folks want to book profits, to be expected.But, as always, we prefer to look at what fundamentals are telling us about the longer view, and that story is very clear. It was spelled out in precise detail by someone who should know. Not an analyst, not a technician, not a TV talking (or shouting) head. How about the CEO of the world’s leading gold producer? Speaking to the RBC Capital Markets gold conference in London, Gregory Wilkins, chief executive of Barrick Gold, said simply that, “There's not much gold out there.”Wilkins continued: “Global mine supply is going to decrease at a much faster rate than people generally believe. Many of the new mines that people are anticipating will never come into production.”South African production is falling, while as for much of the Third World, well, “You don't put yourself in harm's way. It's a non-starter to invest in a country that takes your mine away from you,” Wilkins said. “The list of countries where we won't go is getting longer. There's Venezuela, and all the countries in Latin America that are influenced by (Hugo) Chavez. In Ecuador they withdraw licences after they have been issued: you can't tolerate that kind of instability. Russia is another country where things are deteriorating.”Wilkins’s projection: “It's hard to say where the price of gold is going because we're in uncharted waters. I would say it could easily move to $900, $1,000, or beyond. It could happen very quickly.” Words from someone worth paying attention to …
No comments:
Post a Comment