Peak Gold is Close — or Maybe Already Here

- September 26th, 2017

Speaking at the Denver Gold Forum, Randall Oliphant of the World Gold Council said global gold production could be set to decline from now on.

World gold production could be set to decline from now on, according to World Gold Council Chairman Randall Oliphant. 
Speaking to Bloomberg at the Denver Gold Forum, Oliphant said, “I think we’re pretty close to [peak gold production] if we’re not at it. We just haven’t been finding the new gold deposits, there hasn’t been an interest in bringing on as many mines as we had in the past and a lot of companies have declining production profiles.”
Oliphant sees gold production plateauing before beginning a slow decline. “We’re not going to fall off a cliff in the near term,” he said, “but at the same time it’s really hard to understand how we’re going to produce enough gold to meet all of this demand.”


He explained that major gold miners have been in retrenchment for so long that “it’s really hard to see how they’re going to have … greater production in the future than what they have today.” That said, Oliphant does see potential for intermediate players to fill the gap.
New Gold (TSX:NGD,NYSEMKT:NGD), whose board Oliphant sits on, is one company whose production he expects to grow, and Agnico Eagle Mines (TSX:AEM,NYSE:AEM) is another. “The intermediates are growing, and that’s always been the sweet spot for investing in the space as far as I’m concerned.”
Oliphant also spoke briefly about the possibility of gold benefiting from a collapse in bitcoin, a scenario laid out earlier this month by JPMorgan (NYSE:JPM) CEO Jamie Dimon. “I agree with him,” he commented, also noting, “[gold] has a lot more substance behind it and staying power.”
In closing, he shared his thoughts on where the gold price may go. “I think in the next 12 months it’ll be higher than it is today, and in the medium term much, much higher than it is today,” he said. When pressed for specific prices, he suggested gold could be trading at $1,300 or $1,400 per ounce in the next year, and could later retest the highs it reached in 2011. “I don’t see any reason for that not to happen.”
Watch Oliphant’s full interview with Bloomberg below:

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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