The biggest gold story not being told
Duncan Richardson, News Editor
23 Mar 2017, 11:58 a.m.
The gold price has reacted well to last week’s much anticipated U.S rate hike. The price has advanced over $25 per ounce and is fast approaching the psychological $1,250 barrier.
Investors are once again turning to the yellow metal for protection from future inflation caused by Donald Trump’s $1 trillion stimulus plan. Most analysts focus their attention on demand while few understand the true dynamics behind supply.
After three years of a falling gold price, the largest mining companies scaled back future exploration and focused solely on cutting costs, unsurprisingly global gold production has fallen dramatically. It takes years to bring a gold mine into production so supply will not increase for the foreseeable future.
With so much uncertainty in the world, demand could pick up dramatically in the weeks and months to come.