Gold Stocks Will Never Come Back?

[FarmerD]

From this it looks like gold miners may be going extinct.  Physical gold in hand may benefit though. 

Of course, there's always the possibility that the relationship between gold mining stocks and gold itself has broken down. Perhaps investors have simply lost faith in the management of the gold mining companies or their ability to profitably mine gold. Will Becker, a securities analyst at Behind the Numbers, released a research report last year on gold mining companies in which he argued that mining companies are facing a slew of troubles, like an inability to secure financing, increased royalty fees, taxes on mining, and the declining quality of gold ore.

In fact, the average grade of gold mined has fallen to 1.5 grams per tonne of ore. "To put this in perspective, average ore grades in the U.S., Canada, and Australia were at 12 grams per tonne in 1950 and around 3 grams per tonne in 2009," Becker writes. In other words, the world might simply be running low on easily mineable gold. That, of course, could be a very bullish sign for gold prices, as the increase in world supply of gold could be slowing dramatically.

In the end, gold's value will hinge on the future role the precious metal will play in the global monetary system. If gold is, in fact, becoming more difficult to mine, the wealthy will find some other pretty metal to adorn themselves with and some other investment to hedge against inflation and tail risks.

If, on the other hand, gold will ultimately function as the only refuge for investors in a world where governments are debasing every other form of currency, then the precious metal stands to appreciate far beyond its current value.

http://finance.fortune.cnn.com/2014/02/ ... -prices-2/