Just ask Barrick Gold. Here is what Aaron Regent, president of ABX said:
"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.
"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.
Barrick is moving fast to wind down the remaining 3m ounces of its infamous hedge book over the next twelve months, an implicit bet on rising gold prices over time.
Mr Regent said the company had waited too long to ditch the policy, which has made the company enemy number one among 'gold bug' enthusiasts. The hedges oblige Barrick to deliver part of its gold into futures contracts set long ago at levels far below today's spot prices.
"It was clear to me that there were a significant number of institutions who wouldn't invest in Barrick because of the hedge book," he said.
Nice that he recognizes this, but after he covered 9.6 million ounces in their hedge book! 3 million ounces left!
Because after blowing billions and billions and billions of dollars hedging gold, Argent ends the interview with this cartoonish statement:
The hedge book venture has not been a happy one, but those who predicted that Barrick would eventually "blow up" on its contracts may owe the company an apology.
Wait--Wasn't ABX short 20 million ounces of gold in 2001???
ABX owes shareholders an apology!