In an environment of rising capital expenses, gold producers big and small are left with little or no free cash flow. Instead of investing in exploration to maintain production, too many companies are cutting costs and high-grading their current resources.
Underweighting of gold in both private portfolios and official reserves bodes well for gold-price prospects in the years ahead – and is one of the key factors suggesting that the price of gold could easily double by the end of this decade.
Gold Comex futures jumped 1.81% this week after surging 3.13% last week and briefly exceeded the level of $1,770 on Thursday. Year-to-date gold futures rose 12.94%, compared to S&P 500 index 17.94% and the Euro Stoxx 50 index 14.72%.
The investigation into the inner workings of the gold market that are out of public view and decided behind closed doors in central banks is an ongoing effort. It has been that way for years, and fortunately, GATA has been there relentlessly compiling the mounting evidence.
Global capital markets specialist and best-selling author James Rickards discusses the serious financial threats facing the US dollar, which he contends is currently at the center of a new currency war that threatens its very existence.
Gold continues to show a strong inverse relationship with the S&P 500, hinting at losses ahead. Improving US economic data ought to reinforce selling pressure, with diminishing hopes for another round of quantitative easing from the Federal Reserve.
Perhaps inevitably, concerns about global economic growth in the second half of the year are starting to stoke fears that the Federal Reserve will need to introduce further stimulus - already dubbed "QE3" - to give the recovery another jolt.