What a year it is turning out to be. Just about everywhere in the world you look, there is political trouble of some sort. Uncertainty abounds and, when there is uncertainty, gold benefits.

Gold mining companies that were in the red are moving quickly into the black. Debt is being restructured or eliminated completely.

Gold mining companies operating in countries with dodgy currencies are already a sweet spot that looks like getting sweeter as time goes by.

Some see a deficit of physical gold on the horizon; some calculations point to the probability of bullion banks being unable to gain access to physical gold to cover their paper gold positions some are believed to have recklessly created for themselves.

It is not uncommon for bullion banks to sell gold against future delivery contracts, which, in reality, means that they sell gold that they do not physically possess.

It is also not uncommon for central banks to on-sell gold to bullion banks on the basis of that gold having to be returned on a set date.

Some of those doing the sums are coming to the conclusion that some of them will not be able to return the physical gold when they are supposed to do so.

Although central banks all carry gold on their balance sheets, their vaults do not contain that gold as it could already have been turned into jewellery.

A higher dollar gold price and costs in weaker local currencies are proving a panacea and the forecasts point to free cash pouring out of the ears of such gold companies by year-end.

Last Friday, AngloGold Ashanti reported that it had gone back into the black in the six months to June 30. The Johannesburg- and New York-listed company gave notice of its expectation that it would report headline profits of up to $99-million, a very far cry from its headline loss of $128-million in the six months to June 30 last year.

Lower operating costs in weak local currencies and solid dollar prices have also resulted in gold mining company Gold Fields moving from breakeven into expectations of an interim profit.

Debt-free DRDGold has seen its market capitalisation rocket from R700-million in October last year to R4.9-billion earlier this year. The world relies on gold to uphold value as global currencies stutter and governments weaken.

“We might be heading towards a deficit in so far as physical gold is concerned,” DRDGold CEO Niël Pretorius told journalists on a media visit to the company’s Ergo retreatment plant. “Maybe the banks have got ahead of themselves a little bit. Maybe there’s too much paper gold out there and not enough physical gold to cover their position,” he added.

The World Gold Council believes that a new class of gold investor could emerge from the decision of the English to exit the European Union.

Investors are confident that gold will play its age-old safe haven role and that confidence is also shown in gold shares rising on global markets.

Gold, which is countercyclical, is clearly moving out of its downside.