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Gold's role as the alternative currency
November 27, 2006
We believe that gold's role as the alternative currency to the dollar will
be the largest reason for the coming price advance above all time highs, but
the supply/demand picture for the market is helping make the advance that much
easier. Australian gold production numbers for the 3rd quarter came out
this morning and ounces coming out of the ground in the fourth largest gold
producing country are continuing to slump, off nearly 8% over the last year. This
is the same situation that South Africa is experiencing and other countries
are barely keeping up. Gold producers are running up an down escalator. Despite
decade high prices and a $150 per ounce increase in the last year alone, production
is continuing to fall. Gold could increase an additional $200 per ounce
and producers would still be struggling just to keep production flat, much less
drastically increase it over time. Anyone who expects higher prices to
increase production doesn't understand that we're past that point in the mining
industry. The cheap stuff has been mined, companies are reducing their
exploration budgets via massive consolidation, and they're shopping on Wall
Street for more production rather than going out and exploring for more ounces. All
of this is extremely gold and precious metals positive news over the long term.
Gold hits plateau
November 27, 2006 11:20am The Sunday Times, Australia
AUSTRALIA'S gold output dipped slightly in the third quarter from
the same period last year, despite new gold operations coming into production.
Surbiton
Associates said yesterday in its latest quarterly report on the Australian
gold mining industry that production in the three months to September was
62 tonnes.
The result is a one tonne rise from the previous quarter but a two tonne
drop from the same period of 2005.
For the nine-month period, production was 183 tonnes, 14 tonnes or seven
per cent less than the first nine months of 2005. |
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