(Kitco Commetary) The fundamentals that drive gold prices higher are in full force and improving:
- India’s monthly gold bullion imports are expected to rise by as much as 50% in the coming few months
- India used to be the biggest importer of gold bullion until China took over as the biggest importer of the precious metal two years ago. And demand for gold in China remains strong as well.
- But while demand for the precious metal is rising, production is declining. In the first five months of 2014, U.S. mine production was 85,400 kilograms (kg), down four percent.
I view the decline in gold bullion prices as a buying opportunity. Over the past few weeks, it may seem that gold bullion prices have gotten weaker, but that is only if you look at gold bullion in U.S. dollars. Look at gold bullion in euros or Canadian dollars (or almost any other currency for that matter), and you will quickly see gold prices are much higher outside the U.S. than in the U.S.
As far as I’m concerned, shares of quality gold mining companies are selling at bargain prices. They offer a great opportunity for contrarian, buy-low investors.
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