Gold Production May Plunge After Price Fall Supporting Gold

Market Update – GoldCore

Gold Production May Plunge After Price Fall Supporting Gold 
Today’s AM fix was USD 1,396.50, EUR 1,068.89 and GBP 909.42 per ounce.
Yesterday’s AM fix was USD 1,405.25, EUR 1,074.68 and GBP 918.64 per ounce.

Gold fell $13.80 or 0.98% yesterday to $1,398.20/oz and silver slid to $22.28 and lost 0.92%.

Gold rebounded to trade above $1,400/oz this morning as the dollar and equities retreated, increasing demand for the yellow metal as a safe haven and store of value.

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Gold’s latest correction has put gold mining companies on the defensive globally and many are under severe pressure. Gold mining companies have been forced to cut costs, investment and most importantly for the price of gold - production.

All of which will likely worsen already strained relations with workforces, particularly in poor countries in Africa and South America.

There are many uneasy agreements between mine workers and companies involving promises of higher wages, better working conditions and new rights. Soon, the pay promises are set to be tested.

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PHILA GOLD & SILVER INDX – (Bloomberg)

The Philadelphia Stock Exchange Gold and Silver Index is the benchmark gold mining index in the world. It is a capitalization-weighted index which includes the leading companies involved in the mining of gold and silver globally.

The index has performed miserably in recent years and is down 34.6% YTD and 34.56% in the last year. Indeed, the index is at levels seen nearly 30 years ago in 1984.
Miners are having to go deeper and deeper into the ground in the attempt to extract the precious metal from the bowels of the earth. Ore grades are declining globally and peak gold has been reached in South Africa and may have been reached globally.

The poor miners in South Africa who are wielding machetes today will testify as to just how very hard it is to mine for the earth’s precious metals – despite the huge advancement in technology seen in recent years.

News From Around The World

China Gold Imports to Keep Growing After Hitting Record High   Reuters
Gold Default: The “Zero Hour” Scenario   The Daily Reckoning
Major Insider: Time to Buy Gold; The Chinese Want to Make the Yuan Gold Backed   Economic Policy Journal

Insight: Cyprus, Energy & Gold: Wealth Protection In A Lawless World

April's edition of Insight takes a close look at the recent banking crisis in Cyprus and how it is causing other states to consider the imposition of taxes on depositors' savings. The reasoning behind these 'taxes' is to part cover the colossal levels of  indebtedness that most nations find themselves in.

Chris Sanders, our Insight April contributor, maintains that it is only capital accumulation enabled by real economic growth that can alleviate the massive levels of indebtedness. Unfortunately, Sanders finds that this is nigh on impossible given the excessive energy costs required, or as he puts it, 'the marginal energy to power such growth is not there to do so.'

On April 15th, a small number of traders executed a suspicious sale of futures on the COMEX in New York which resulted in an 18% fall in the price of gold. Sanders points out that on the one hand we have this level of indebtedness that isn't going to go away, and on the other, we have a financial system that appears to operate outside the general rule of law. When you take everything into account, Sanders surmises that it's all a great advertisement for holding gold or silver in secure storage on an allocated basis.

ENDS

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