I can't believe I am agreeing with Sydneyguy & Timber! Actually...

I can't believe I am agreeing with Sydneyguy & Timber! Actually I do at times even though we have different views on where gold is going in the medium term.

The paper market can go long or short. Was anyone complaining when the paper market & ETFs were buying gold hand over fist?

Back in 2005 working on a commodity desk when ETFs were launched for gold, I wrote a piece saying these products would come back to haunt the gold price. I.e the buying would build an arsenal of supply that would one day flood the market when the POG least 'needed' it. There is still a massive amount of gold in ETFs even though its less than half what it was. This is demand that would never have happened without ETFs. So love them or hate them ETFS still have created a huge amount of net demand. The ETFs imo will again turn net buyer at some point & I think within the next 3-6 months. I don't think we will be complaining then.
Without the paper market producers like NCM would have an extremely illiquid market to sell their production into & it would make it very difficult for them to access debt & other financial instruments. Basically gold would be lie rare earths, bloody difficult to finance.

In regards NCM, it has performed poorly for the last 3-4 years & suffered from bigger was better syndrome no matter the cost of production. Its biggest asset is its gold in the ground. It has massive reserves especially considering its rate of production. Compared to some junior producers NCM at $9.20 is still over valued by double in comparison purely on an ounce production basis. Perhaps its the gold in the ground that they have is the reason why, however I don't see the point of having 40 years worth of reserves. NCMs saving grace may be a takeover by one of the big boys that look to ramp up production to make the most of those reserves.