Gold Prices 2012-02-16

How will gold prices fare in the future? Perhaps this article gives us a clue.

"TORONTO—Barrick Gold Corp. said fourth-quarter earnings were little changed from a year earlier as cash costs edged higher, while revenue rose nearly 26% on higher gold production and prices." - JUDY MCKINNON, WSJ, 2012-02-16 Original ARTICLE.

I find it interesting that in the midst of historically high gold values (yeah, I know they're no the highest at his very moment, but they're still pretty high), a company with its fingers in so many different pies like Barrick Gold is failing to make higher earnings. Is this gold goliath not taking advantage of new projects, or is it just that those projects have not come into production yet?

If Barrick and other large gold producers do have operational new project, spurred on by the last decades rising gold values, shouldn't they have higher earning even in the face of rising costs? After all, the final product has increased in value nearly 10 fold in the last 12 years.

What does this mean? Could it mean that if gold miners aren't making the money they want to make from high gold values, they may decide to cut back production? Thereby reducing supply and increasing gold value even more. Could this be the mechanism that drives gold values up to the much spoken of $5000 per ounce?

I am not a geologist, economist, or even accountant, but I couldn't help but have these thoughts while I read the article above.

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