What Does the Surge in Canadian and Alaskan Gold Mining Mean for the Value of Your Gold Scrap?

Recycle and Refine GoldRecycle Precious Metals
Written By Barry Lenson

Gold is trading for $1,900.90 on the London Fix. Just to put that price in context, let us mention that the all-time historical high trading prices for gold is $1,920. We are in stratospheric territory.

What is driving up the price? It’s more than the traditional law of supply and demand (which of course is at work too). Most analysts agree that the immediate driver of these high prices is the trade conflict between the U.S. and China. If things continue the way they are going, the flow of gold into the U.S. from China should slow to a trickle.

A Surge in Gold Mining Is About to Begin

Also, while we are writing this post, gold mines in Canada and Alaska are ramping up production. And we are talking massive increases.

The most newsworthy of the new mines is one called the Pebble Mine, located in the Bristol Bay watershed in Alaska. For more than 20 years, controversy has raged over whether or not to build this mine, which will be the biggest mine in North America. It’s a complicated controversy. Salmon fisheries claim that if it is built, Pebble could produce pollution that would kill their industry. Some Alaskan environmentalists don’t want the mine to happen. Other Alaskans, who would welcome the jobs created, want Pebble to move ahead. Pebble Mine, like most gold mines, will yield copper ore too. If it is built, the mine will be an immense pit that is one mile wide and one-quarter mile deep. Immense dams will be needed to contain the runoff and chemicals that the mine will produce.

And would you believe that the Pebble Mine is only the most news-making of the mines that are planned to open north of the Canadian/U.S. border? At least four other corporations, including Barrick Gold and Kinross Gold, are planning to expand mining operations too. According to some estimates, the four new Canadian mines, added to the Pebble Mine in Alaska, could double the world’s annual gold production. And they could continue to produce at that capacity for the next 18-20 years.

What Does that Mean for the Price of Your Gold Scrap and Investments?

Frankly, it is difficult to predict where gold prices will be a few years from now. There are too many “moving parts” among the factors that influence pricing on a day-to-day basis. As noted above, there are trade policies and trade wars. There is the possibility that if we see a tremendous uptick in the production of mined gold, that could cause prices to level off. (We doubt that prices will fall dramatically.)

To simplify the process of figuring out what is going on, we would like to suggest that instead of watching dozens and dozens of statistics (like the number of new mines opening, or their production), you focus on only one . . .

The daily trading price of gold

That might seem short-sighted. After all, the price that gold is trading for today doesn’t help you predict what gold will be trading for tomorrow. But when you look at the daily trading prices over, say, the last month, you begin to see trends. What has happened in the past can serve as a way to predict what will happen in the future. And how do you track daily prices? You can do it easily by checking the trading prices we post every day on our home page.

Another Way to Increase Your Chances of Profiting from Gold Investing

We are tremendous believers in investing in gold scrap rather than in gold coins or bullion. Why? Because scrap can increase dramatically in value and give you a very high return when you buy it at low prices and have us test and recycle it for you. You could spend $200 for a batch of old eyeglass frames (or bench sweepings from a jewelry factory, or scrap from a dental lab) and get $1,000 or even more for the gold they contain. That kind of return will never happen if you invest in bullion or coins, which are tied in value to current trading prices.

Of all the gold investments available to you – from bullion to gold stocks – scrap is the way to go. To learn more about investing in gold scrap and having us test and recycle it for you, we invite you to call our precious metal scrap consultants at 800-426-2344.

Barry Lenson
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