What The Miners Expect
As you very well know, the price of gold can be quite volitile. In a business such as gold mining, the price of gold, from the time a mine decides to begin production until the time in which that gold is actually brought to market, can go up or down substantially.

For example, let's suppose you are a mine and you have located a gold deposit that you want to mine and you calculate that the cost per ounce to get that gold out of the ground is going to end up being around $1400/ounce. Further, you know that the price of gold today is $1600/ounce so you stand to make a $200/ounce profit. The problem is though, is that by the time you actually get that gold out of the ground and to the market, the price of gold could drop below your cost, thereby saddling the company with a loss.

To prevent such a scenario, gold miners engage in what they call "hedges." Simply put, a hedge is a contract that a miner enters into that locks in the future price at which that miner will be able to sell his gold. When miners are expecting lower gold prices, they enter into hedges. When miners are expecting higher future prices, they don't enter into hedges.

Now, take a look at the following chart that shows the decreasing number of hedges that miners have been entering into over the last 10 years. It is a very loud statement that the experts, the miners themselves, expect gold prices to continue to increase.

As you can clearly see, the experts, the miners, expect higher prices going forward as they have significantly reduced their hedge positions. In fact, let's hear it directly from the miners themselves. Here's a little excerpt discussing their expectations.

We know that Newmont Mining (NYS: NEM) CEO Richard O'Brien believes gold will reach $2,300 per ounce next year. Kinross Gold (NYS: KGC) CEO Tye Burt believes that conditions for gold have "never been better," and adds: "Not only is it a safe haven for investors and offers a unique alternative to currencies, but the fundamentals of supply and demand are extremely strong." Barrick Gold CEO Aaron Regent recently stated: "Directionally, the factors that have basically caused the gold price to perform the way it has are still in place. If anything, they're intensifying." Source