Worth repeating, as I have said before, Silverado Gold Mines production could be around $500/ton which would allow the company to mine at a profit, while the average production cost for the majors $1,100/ton. $900oz Gold will force the majors to mothball some of their projects while selling off the low grade projects in order to survive. With world wide high demand for physical gold soaring, Silverado Gold Mines could be among the few with a sign on the front door "Open for Buisness" selling the flavor of the day, high grade "Gold-Antimony" All the company needs to do is find the right financing to put the Nolan Creek project into production, and the world will beat a path to their front door!! GRIM REAPER's "DD" Work http://agoracom.com/ir/Silverado/forums/discussion/topics/579172-silverado-est-production-cost-500-vs-1-100-for-major-mining-companies/messages/1818780#message

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This Triggered The Short Squeeze That Is Crushing Gold Bears

“Much of this demand is coming from China which is on pace to buy 1,000 tons, and will in fact be the largest consumer of gold in the world. We also have the central banks themselves aggressively buying gold. In the month of July we had Russia, Turkey, and others, all buying physical gold.

There is this great demand for physical gold, but at the same time there is a shortage. Right now in India there is a $22 premium. This is because India is experiencing a shortage of physical gold. So while there is a lot of paper gold, and this is what is in the process of being corrected in the market, the paper players are getting squeezed by the demand for physical. This has meant the price has only had one way to go because of the enormous demand for physical gold, and that’s been bad news for the bears who are short on the paper side.

Overshadowing all of this we have seen a plunge in the supply of new gold. One would think with the price drop in gold that there would have been a lot of inventory for sale. But the reality is that there is less and less gold coming from recycling, and less and less gold coming from the gold producers. So demand for physical gold remains quite robust, while the supply is shrinking, and this can only mean one thing -- higher prices.”

Meanwhile, a lot of the big gold projects such as Barrick Gold’s Pascua-Lama project are being shelved. They are not going ahead. So the fact that these large projects are being shelved, what this means is that the price of gold is going to have to get back up to $1,900 in order to have companies even consider these large projects.

It costs billions and billions of dollars to fund those projects, and there is no way those projects are moving forward with the price of gold anywhere near current levels. So we are in a vacuum here, where the room in the gold price is going to be much bigger on the upside than it is on the downside.”

“One of the reasons for the collapse in gold, and this war between the physical gold and paper gold market, is related to the unintended consequences of quantitative easing and the fact that borrowing costs are essentially at zero. This has meant that a lot of the central banks and bullion banks have introduced trillions of dollars of commodity derivatives, particularly in gold, and they are now essentially ‘floating’ around.

The problem is that because of all of this tremendous physical demand for gold, and the fact that there is too much paper ‘floating’ around, whether it’s paper barrels, paper copper, or paper gold, one of these days this squeeze is going to bankrupt the counterparties.

This is why you have to look carefully at these big banks, hedge funds, and big trading houses. To them, they all view these commodities the same way, it’s just a cost to carry. But what’s happening right now is that in the physical world the demand is so extraordinary that we we have this backwardation in gold as an example. This means that there is a squeeze going on in the gold market.

There was simply too much ‘paper’ that has been put out there, and now it is quite clearly that there is not enough physical gold backing that up that paper. So my expectation is that over the next few months, every option expiry, as we approach each of them, we will see a short squeeze in the price of gold, and that means significantly higher prices as we move forward and the squeeze in gold accelerates.”

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/8/27_This_Triggered_The_Short_Squeeze_That_Is_Crushing_Gold_Bears.html