With gold breaking the $1,200 level, today a legend in the business warned King World News that continued manipulation by Western governments in the gold market is now destroying future gold supply. Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also warned KWN that available physical supplies of gold are disappearing as the plunge in the gold price intensifies to the downside.
Barron: “ETFs continue to be stripped of gold and the bullion banks continue selling the gold overseas when they can arbitrage the price. So investors just need to sit tight and ride this out because available physical supplies of gold are dwindling rapidly….
We are at or very near the bottom because gold has now tumbled below the cash cost of production for the mining industry. So almost nobody is making money mining gold at these prices. As gold falls below the average “cash cost” it begins to get very dire and we start to see mines close.
I have just seen two operations close without any notice in the last couple of days. Certainly the world is not out of the woods yet, and another crisis is just around the corner. A major crisis will emerge in Europe or the United States that will move the price of gold significantly to the upside.
In the meantime, if the bullion banks do not turn the price of gold higher we are going to see gold production plummet. I’m not sure that’s what Western governments want to see at this point. They (Western central banks) are already supplying gold, along with the ETFs being drained, in order to meet the massive global demand for gold. The last thing they need is to see a supply crunch.
If that’s the case, the gold simply won’t be there anymore and Western vaults will be drained at an ever greater pace. There have already been a lot of projects which have been canceled or deferred and this will definitely impact supply already in years to come.
It takes a long time to commission a mining project, and when they cancel it or defer it they stop work and it takes a long time to get going again on these projects. So supply will already be constrained in the marketplace going forward, now it’s just a question of what degree supply will be constrained.”