Do Gold Mining Companies Buy Their Own Product?
For the most part, gold mining companies do not buy gold, nor for the most part do I believe they should do so, unless they have a large amount of cash lying around that they cannot preserve holding it in fiat currency. In a massive rise of inflation for example, it might be wise to buy gold and hold that rather than cash in the form of short term treasuries. But thankfully, we have not witnessed an inflation problem like that, at least not yet. Mining companies should, especially in a bullish market like we have now for gold, be able to best employ their financial resources in expanding gold production. And since mining is very, very capital intensive, it is rare that gold mining companies are in a position to buy gold. One company we can think of in the past, namely Gold Corp, under Robert McEwen’s leadership did hold the gold they produced and in fact did go out and buy gold when the yellow metal was selling under $500 per ounce. That served the company well, but as it needed resour