Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Billionaire Buys Gold for the First Time

  by    0   2

Billionaire Sam Zell said he recently took the plunge and bought gold.

“For the first time in my life, I bought gold because it is a good hedge,” Zell said during an interview on Bloomberg TV.

Zell, 77, is the founder and chairman of Equity International, a private investment firm focused on building real estate-related businesses in emerging markets.

He told Bloomberg TV shrinking production also makes gold an attractive investment right now.

Go back to supply and demand. Supply is shrinking and that is going to have a positive impact on pricing.”

Zell pointed out that mining companies have put very little money into exploration in recent years. This does not bode well for gold output in the near future.

The amount of capital being put into new gold mines is almost nonexistent. All of the money is being used to buy up rivals.”

Zell was referring specifically to two mergers in the mining sector. Late last year, Barrick Gold and Randgold Resources combined in an $18.3 billion deal that created the world’s top gold miner by value and output. But the new Barrick’s reign as top dog in the gold mining sector didn’t last long. Last week, Newmont Mining Corp. announced it was buying Goldcorp, Inc. in a $10 billion deal. Once the merger is completed, the Newmont Goldcorp will top Barrick’s $24 billion market cap. As Kitco News put it the merger will “create an unmatched portfolio of operations, projects, exploration opportunities, reserves, and people in the gold mining complex.”

We’ve reported extensively on shrinking mine output and the prospects of declining production in the foreseeable future. According to Bloomberg, “The combined gold reserves still buried in mines — an indicator of production prospects– shrank by more than 40% in 2017, from its peak after companies cut spending on exploration and development of new projects.”

There are signs that output is beginning to plateau. Some analysts even believe we may be at or near “peak gold” — the point where the amount of gold mined out of the earth will begin to shrink every year.

While world gold output hit record highs in 2017, it only grew by 5.7 tons according to the World Gold Council. That represented the smallest increase since 2008.  According to a report by S&P Global Market Intelligence, while gold production will increase marginally over the next three years, there are troubling signs on the horizon. In fact, some analysts project gold output in several key countries, could slump to “generational lows” in the midterm.

Zell is right about gold being a good hedge. We saw this firsthand as stocks plunged at the end of 2018. Gold outperformed the S&P 500 in December, through the fourth quarter of 2018, and over the entire year.

Download SchiffGold's Gold vs GLD EFT's Guide Today

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Silver Expected to Shine in 2020

Silver will shine in 2020 with higher prices supported by expanded physical investment and industrial demand. This is the projection of the Silver Institute in its 2020 Market Forecast.

READ MORE →

Subprime Auto Loan Delinquencies at Financial Crisis Levels

Subprime auto loan delinquencies have exploded, taking the overall delinquency rate to Financial Crisis levels. But the economy is supposedly great. What is causing this spike in delinquencies? According to the latest data released by the New York Fed, serious delinquencies (90 days or more past due) surged by 15.5% in the fourth quarter of […]

READ MORE →

Wyoming Considering a State Gold Depository

A bill introduced in the Wyoming House would establish a precious metals bullion depository in the state. It would not only create a safe place to store precious metals; it could also facilitate the everyday use of gold and silver in financial transactions in Wyoming and set the stage to undermine the Federal Reserve’s monopoly […]

READ MORE →

US Government Kicks Off 2020 With Another Big Deficit

The US government posted another massive deficit to start out calendar-year 2020. According to the latest data released by the US Treasury Department, Uncle Sam spent $32.6 billion more than it took in last month. That compares with an $8.7 billion surplus in January 2019. Analysts had projected an $11.5 billion shortfall in January.

READ MORE →

Fed Chair Powell Lets the Truth Slip Out

Every once in a while, the truth slips out of Federal Reserve Chairman Jerome Powell’s mouth. Powell was on Capitol Hill this week addressing Congress. He continued to talk up the economy, but in a moment of honesty, tacitly admitted that the central bank is already engaged in extraordinary monetary policy, and confessed the Fed […]

READ MORE →

Comments are closed.

Call Now