1 Oz. American Eagle Gold Bullion Coin
PRODUCTION DOWN, DEMAND UP.
Every major gold mining country has reported slumping mine production of gold in 2006. As a result of mine strikes, environmental disputes and increasing production costs, global production is continuing to sag and shows no signs of significantly reversing this trend in the near-term. South Africa’s gold-mining output has repeatedly disappointed and this also includes major declines in production in Peru and slumping output in Australia.
“We may see the occasional quarter or monthly production figures that show a spike in production, but the trend is for global production to remain flat to falling in the future,” said research report from Blanchard quoted by Dow Jones in January 2007. “There have been no new world-class discoveries in the last decade, coupled with slashed exploration budgets and industry consolidation.”
1 Oz. Canadian Maple Gold Bullion Coin 99.99% pure
BEATING PLOWSHARES INTO GOLD:
CHINA ENTERS ITS GOLDEN ERA.
Gold ownership for Chinese citizens was legalized in 2004. A system for selling bullion to the largest population in the world is slowly getting off the ground. Once this is established, the effect on gold demand will be staggering. Meanwhile, India, already the world’s largest consumer of gold, is experiencing an 80 percent growth in gold investment following a loosening of trade restrictions.
“Chinese gold consumption is expected to rise 17% this year,” news service Bloomberg quoted China Gold Association chair Cheng Fumin of 2007. “China is the world’s third biggest consumer of the precious metal and is expected to use 350 metric tons this year, up from 300 tons in 2005, owing to an increase in demand for bullion as an investment.”
1 Oz. South African Krugerrand Gold Bullion Coin
CENTRAL BANKS ARE BEGINNING TO DIVERSIFY INTO GOLD.
The effect of central bank policies on the price of gold has always been significant. Today a new era of central bank purchasing is set to begin as the world’s key banks look for diversification of their foreign exchange reserves away from U.S. dollar dominated holdings. The Russian central bank has begun adding gold to reserves, following a commitment to do so in 2006. Other Asian banks are rumored to be planning a similar move. This trend in central bank buying is extremely critical and will have a profound and immediate impact on the gold market in 2007.
“The price of gold will continue to go up and probably very substantially. In the long run, it’s very clear that central banks are basically increasing the supply of money and the supply of gold is obviously very limited.”
— Dr. Marc Faber, January 8th, 2007
NYSE: GOLD