NEW YORK ( TheStreet) -- If you're like me, you've bought gold due to the money printing policies of most developed countries and the effect those policies will have on the future purchasing power of our paper money. Probably also because there's no viable way for governments to escape the consequences of all the debt they've piled up. And maybe because politicians can't be trusted to formulate a realistic strategy to avoid any number of monetary, fiscal, or economic crises going forward.
These are valid, core reasons to hold gold in a portfolio at this point in time. But a new trend is under way, and someday soon it will be just as much a driving force for gold prices as anything else: A good old-fashioned supply crunch.
A few metals analysts have mentioned it, but it escapes many and certainly is off the radar of the mainstream financial media. But unless several critical factors reverse course, a supply shortage is on the way with clear implications for the price of gold.
The following four factors are combining to diminish gold supply. While we've touched on some of them before, put together they're creating a perfect storm that will, sooner or later, impact the gold market in several powerful ways. As these forces gather steam, you'll want to make sure you've already built a substantial position in physical bullion.
Factor #1: Production Pullbacks, Development Delays, Exploration Cancelations
Gold producers don't operate in a vacuum. If the price of their product falls by 30% over a two-year period, they've got to make some adjustments. And those adjustments, more often than not, result in lower production, delayed mine development plans, and cuts in exploration budgets. The response is industrywide, and even low-cost producers are not immune.