Gold scarcity

Imagine you are a goldmine owner or manager. After a price crash in gold, what would you do? Probably, reducing the production to the minimum to preserve your reserves for the future.

If everyone thinks the same way, the global gold production becomes scarce. And when a commodity becomes rare, its price soars. It is that simple.

But, is it happening? In general, yes.

The chart above shows that it's expected a real decrease in gold production in a few years time (National Bank Financial).

Besides, except China (which is not exporting) and Ghana, the rest of the biggest producers are going to reduce the gold supply probably starting this year.

If we look at the mine companies themselves, as it is developed here, they are forecasting less gold, almost immediately.

And we wonder, less physical supply and increase in physical demand...