Gold production has peaked at 3,155 tonnes

REUTERS/Eddie MulhollandBritain’s Queen Elizabeth tours a gold vault during a visit to the Bank of England in the City of London December 13, 2012.

The price of gold could rise substantially this year, as a supply crunch takes hold.

Global gold production is expected to fall 3% this year, according to a report by Thomson Reuters’ GFMS metals research team, cited by the Financial Times.

That would end a seven-year streak of rising gold supplies, which peaked in 2015 at 3,155 tonnes.

The decline is due to the fall in the gold price, which has dropped more than 40% from its highs in 2011.

This made gold a less profitable prospect for miners, who invested less in new gold projects.

The FT quotes Ross Strachan, a precious metals demand manager at GFMS, who said the expected output fall this year would occur “as the contribution from projects that had been commissioned in previous years fades and the pipeline for new projects is limited given the current stressed financial climate.”

The report also cites Kelvin Dushnisky, president of Barrick Gold, as saying this trend is “bullish for the medium and long-term gold price outlook.”

He’s not the only one to think gold is about to go on a tear.

Michael Riesner and Marc Müller at UBS told clients that gold could benefit from the volatility that has gripped world markets in 2016 in a 39-page equity sales trading commentary document sent last week via email (emphasis ours):

Initially, we see gold profiting as a safe haven and as of 2017, gold could profit from the US dollar moving in a major top and starting a bear market.

And here’s the chart:

UBS

So with less of it around, and more demand for it, gold could surge in 2016.