The Great Gold Supply Disconnect: Market Severely Undervalues Price

If we take a look at the next five charts, we can see that the gold miners share prices have under-performed the gold price since the beginning of 2012:

BARRICK GOLD

NEWMONT

ANGLO-GOLD

GOLDCORP

KINROSS GOLD

You will notice in all five charts, the price of gold (Gold color) was underneath all the gold mining companies stock price trend up until 2011. Then after 2012, the Great Gold Disconnect took place. Some of these gold miners share prices are much lower than the gold price trend, such as Kinross Gold, AngloGold and Barrick.

What is quite amazing is that Kinross (ranked 5th largest gold miner) produced 2.7 million oz of gold in 2016, and its share price is currently trading at less than $5.  Think about that. Kinross produced $3.8 billion worth of gold in 2016, and its share price is trading at less than $5 a share. Now, compare that to the first chart in article (above) which shows the commodity index trading at a 50 year low versus the S&P 500 Index.

What we have today is a totally insane and hyper-inflated STOCK, BOND and REAL ESTATE market, and a severely under-valued gold market price and gold mining shares.

The investors of the world believe the hyper-inflated values of STOCK, BONDS and REAL ESTATE will continue indefinitely. Unfortunately, the gold supply disconnect that took place in 2011 is a big RED WARNING LIGHT that the something is seriously wrong.

When the broader stock, bond and real estate markets start to crack and drop like a rock, watch for the gold price and the mining shares to head in the opposite direction.

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