Catalyst House

The Gold War Has Begun!

Brace yourself for the impending gold shortage. Gold shortage? Yes. With the launch of a flurry of dedicated gold ETF’s last year, total ETF holdings of the barbaric relic, now exceed total world production. South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed.

Gold Shortage Looms

From Goldprice.org

The world is running low on gold and here’s more reasons why.

As the standard of living in China and India increases more and more people there will be demanding gold. As an example, the Chinese middle class has been increasing and although is a tiny percentage of the overall Chinese population it is still bigger than the entire population of the US now. The Chinese government is actively encouraging their population to buy gold. This is a lot of gold demand in China alone. The same is happening in India and their demand for gold is continuing to increase.

This is on top of the extra demand by cautious and impatient investors who are not getting the results they expect from bonds and investments.

The world’s biggest gold miner, Barrick Gold has noted that finding more and more viable gold deposits is becoming harder. The chart above shows how gold deposit discoveries are rapidly declining and we know what that means. The value of gold, quite apart from the decreasing dollar, is going to go up as demand outstrips supply.

The gold war has begun

You may be asking yourself, did the central banks ever control the gold market? Yes, indeed they did!

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