Gold shares are on the move again. Major factors that will drive gold in 2009 include the dollar topping out, physical demand skyrocketing, the supply chain shutting down and the fact that COMEX gold manipulation has been exposed.
It has been a brutal year for gold and its shares and many may wonder if the $1030 top clocked in March 2008 marked the top for the gold bull market that started in April 2001.
Despite the fact that many analysts want you to believe that gold has failed to act as a true safe haven this year, and that gold will find itself in another bear market for years to come, gold's critical drivers have never been stronger than they are today. Let's face it, physical demand for gold broke record highs in Q2 this year followed by an explosion towards new record highs in Q3 with dollar demand for gold exploding by 45% compared to Q2.
Against this explosion of physical demand we're witnessing a dramatic decline of new gold discoveries, which will force the mine output down for years to come. The junior gold exploration sector is bleeding to death due to its inability to secure financing needed to advance exploration projects. And the supply chain for gold always starts with the junior gold exploration sectoró75% of all discoveries are made by juniors. Simple 101 economics teaches us that falling supply against skyrocketing demand will force prices higher.