A few months ago I sent you a note explaining that major gold discoveries are shrinking.

Simply put, mining companies are no longer finding vast, new deposits of gold to replace their aging mines.

I quoted Pierre Lassonde, the billionaire founder of gold royalty giant Franco-Nevada and former head of Newmont Mining:

If you look back to the 70s, 80s and 90s, in every one of those decades, the industry found at least one 50+ million-ounce gold deposit, at least ten 30+ million-ounce deposits, and countless 5 to 10 million ounce deposits.

But if you look at the last 15 years, we found no 50-million-ounce deposit, no 30-million-ounce deposit and only very few 15 million ounce deposits.

Pierre Lassonde is one of the most well-respected and knowledgeable mining experts in the world. And he thinks we’re reaching ‘peak gold’.

But he’s not alone.

Last month, Rudy Fronk, Chairman and CEO of Seabridge Gold noted:

“Peak gold is the new reality in the gold business with reserves now being mined much faster than they are being replaced.”

Nick Holland, CEO of South Africa’s largest gold producer Gold Fields: “We were all talking about how production was going to increase every year. I think those days are probably gone.”

Kevin Dushnisky, President of mining giant Barrick Gold: “Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook.”

But the biggest warning comes from resource legend Ian Telfer, chairman of Goldcorp. In an interview with Financial Post, Telfer said:

“If I could give one sentence about the gold mining business … it’s that in my life, gold produced from mines has gone up pretty steadily for 40 years. Well, either this year it starts to go down, or next year it starts to go down, or it’s already going down… We’re right at peak gold here.”

It’s hard to pinpoint a top or a bottom. But there is an interesting opportunity here since gold has fallen in price over the last several weeks thanks to an inexplicable surge in the US dollar.

The long-term fundamentals seem pretty obvious-- the people responsible for supplying the world with gold are saying the world is running out of gold and that supply is declining at an alarming rate.

With a commodity like oil, technology tends to solve the problem of declining supply through more efficient production methods.

When ‘peak oil’ started becoming a problem 10 years ago, the industry developed new fracking and horizontal drilling technologies. And other industries like solar and wind began developing better substitutes for oil.

But there’s not really a substitute for gold. And the biggest players in the space are saying we’re running out.

 


And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide

Neither this post nor content posted on the website SovereignMan.com is intended to provide personal tax or financial advice. Before undertaking any action described in this letter, financial or otherwise, you should discuss your options with a qualified advisor-- tax accountant, financial planner, attorney, priest, IRS auditor, Bernie Madoff, etc.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD holds lower ground near 0.6950 on softer Chinese inflation

AUD/USD holds lower ground near 0.6950 on softer Chinese inflation

AUD/USD is holding lower ground near 0.6950 as sellers keep reins following softer Chinese CPI and PPI data. Markets remain risk-averse ahead of US inflation, which is crucial for the Fed's next rate hike move. 

AUD/USD News

EUR/USD: Fake triangle breakout drags Eurozone bulls to near 1.0200

EUR/USD: Fake triangle breakout drags Eurozone bulls to near 1.0200

The EUR/USD is hovering around Tuesday’s low at 1.0203 and is likely to display a steep fall on its violation. The asset is declining swiftly after facing barricades above 1.0240 and has shifted into bearish territory. In the early Tokyo session, the major has given a downside break of the 1.0209-1.0215 range.

EUR/USD News

Gold bears seeking a critical rally in US yields around CPI

Gold bears seeking a critical rally in US yields around CPI

The gold price is flat in Tokyo as markets await the US inflation data for July that will come out during the New York open. The price has been supported by lower yields and that is supportive because the yellow metal offers no interest. 

Gold News

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

HBAR price shows a drop in volume amidst the current downtrend. Hedera Hashgraph has the potential to rally towards 2000%. Traders should keep the smart contract alternative token on their watchlists and consider a dollar cost average approach for investing. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures