These high-grade mines will soon start competing with gold mining's industry leaders
The gold market is not a traditional mineral commodity market where one is able, under certain assumptions and limitations, to analyze supply/demand relationships and to make reasonable forecasts regarding future prices and absorption rates for a selected metal. While fundamentals play a role gold is most often valued in terms of an investment instrument or other intangibles including its attraction as a “safe haven”, especially at times of global economic upheaval.
Primary gold producers, mining companies, add just a couple of percent of gold to the overall accumulated gold inventory annually, and thus can barely predict, not to say control or influence gold prices.
In the light of highly volatile gold market, established and soon-to-be miners have to have superb assets and, what is equally essential, excellent understanding of industry and “guts”, to make a final investment decision and to commission construction of new mines.