Gold ended the week at $1,281 per ounce. While failing to break through the $1,300-per-ounce level, gold remains in an uptrend.

Let’s take a longer-term look at the fundamentals of gold exploration and mining production. The fall of gold prices from their peak in 2012 has been a factor in the reduction of exploration budgets (see the following chart).

Some billionaires have taken notice. Kitco News reports, “Sam Zell, the founder of Equity Group Investments, announced on Bloomberg TV that he bought gold for the first time in his life.

“‘Supply is shrinking and that is going to have a positive impact on the price,’ he said in the interview.

“Zell said that the amount of capital being put into new gold mines is almost nonexistent.

“‘All of the money is being used to buy up rivals,’ he said.”

Rick Andrews is president of Avant Capital Management