Gold News

Gold Investment prospects rosy as Barrick CEO says production is falling

Gold Investment appeal received a boost yesterday (April 29th) after the head of the world's largest gold miner suggested that global output will continue to decline.

Aaron Regent, chief executive officer of Barrick Gold, has explained that global production has been decreasing since 2001, despite Gold Prices tripling during that period.

Speaking at the company's annual shareholders' meeting in Toronto, Canada, he claimed that the trend is likely to continue in the future, meaning demand should far outweigh supply, thus pushing prices higher.

"The gold industry needs to replace almost 100 million ounces of reserves per year, and clearly this has not been happening," he said.

"This declining trend is expected to continue with maturing mines, a scarcity of new discoveries, and longer permitting and construction timelines for new projects."

Mr. Regent's view of strengthening gold prices was echoed last week by Carlos Sanchez, associate director of research at CPM Group.

He explained that investors are increasingly turning to gold as a result of underperforming companies, rising unemployment and disappointing economic data.

"We are going to see weak economic data over the next several months [and] unemployment is expected to rise. You will see investors move to safe-haven assets," he told the Wall Street Journal.

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