“The gold price has bottomed.”

That’s what legendary resource-newsletter writer Bob Bishop told me during a recent reception last month in Toronto that included 20 mining-industry legends.

I was there for the week-long Prospectors and Developers Association of Canada (“PDAC”) conference. PDAC is the largest mining conference in the world.

[ad#Google Adsense 336×280-IA] More than 20,000 attendees traipse the halls and attend presentations and receptions each day.

The intimate nature of the event – hosted by Sprott U.S. Holdings CEO Rick Rule – allowed me to speak one-on-one with Bob.And in the days that followed, I’ve come to believe that his comments about gold were right…

Gold prices have been on a tear since December, up almost $200 an ounce, about 17%.

You can see that incredible move in the following chart…

Of course, like any commodity, trying to forecast the price of gold is difficult. But there are plenty of reasons to believe the precious metal is headed higher from here.

For one, central banks are buying more gold than they’re selling. This activity removes millions of ounces from the market. China, for example, bought more than 3 million ounces of gold in the second half of last year… That’s more than 6% of global production.

Meanwhile, gold companies are spending less money to find gold. Analysis firm SNL Financial reports exploration budgets for precious metals companies fell nearly 60% from 2012 to 2015, including a 19% drop in 2015 alone. Vitaly Nesis, the CEO of Russian gold and silver producer Polymetal, warns that gold supply could fall up to 20% over the next three or four years.

Of course, the less gold we find – the less supply we have – the more bullish it is for gold prices.

Brent Cook, the editor of the newsletter Exploration Insights, is bullish on gold prices for the same reasons. (That’s a big deal, as he has been a gold bear for the past few years.) He told PDAC attendees, “There’s not enough quality deposits to satisfy the needs of everyone in the industry.”

Finally, earlier this week, Federal Reserve Chair Janet Yellen added some wind to gold’s sails when she said the Fed would “proceed cautiously” about raising interest rates in the U.S. That suggests Yellen and the Fed are concerned about economic growth. As gold-fund manager Joe Foster told Newsmax…

A weak economy and the inability to have effective monetary policy creates all sorts of financial risks, risks in the banking system, risks to the economy, and those type of systemic risks are what gold rises on.

In short, gold prices have quickly moved higher. And while the metal may not continue to move higher at such a fast rate going forward, many industry experts I heard from at the PDAC conference believe gold has formed a bottom. That’s good news for anyone who has taken our advice to buy gold.

Good investing,

Brian Weepie

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Source: Growth Stock Wire