According to the chairman of the World Gold Council, we may have already produced more gold in a year than we ever will again.
Chairman Randall Oliphant said that in the best case scenario, production is expected to plateau before declining as demand rises, especially given the world’s current political risks and robust buying of the metal by consumers in India and China.
“It’s not clear how the whole U.S. political system will play out,” said Oliphant, “All this uncertainty seems very fertile ground for people to get into gold… We’re not going to fall off a cliff in the near term, but in the same time it’s really hard to see how we’re going to produce enough gold to meet all this demand.”
At the 28th annual Denver Gold Forum, a gathering of mining executives, bankers, analysts, and hedge funds, the World Gold Council Chairman also reported that he expects to see prices climb as high as $1,400 an ounce in the next 12 months, and advance beyond 2011 highs—when gold reached a record of $1,923.70 per ounce—in the “medium term.”
Oliphant’s concerns that we’ve reached peak gold production were echoed throughout the conference. CEO of Franco-Nevada Corp., David Harquail, said at the conference that new mining projects are simply replacing old assets that are running out of ore and that the industry continues to be in an ex-growth phase.