Gary Marbut is the sanest, safest, most extreme gun advocate you’d ever want to meet, and I wanted to meet him. He lives in a geodesic dome he built himself on family land outside Missoula, MT, where he sells shooting range targets he makes himself and keeps a vast collection of guns that shoot ammo he loads himself. Gary is a gun nut, but he’s also a gun safety nut, responsible use of firearms nut, and not coincidentally, an excellent instructor in the safe use of firearms. He guided me from utter ignorance to shooting my way through a tactical course in a matter of hours. Despite the fact that he is always armed — always — I would say you’re safer running into Gary Marbut on a dark street corner than you would be in a minivan with a teenage driver.

My day with Gary was filmed for the documentary I’ve been making for PBS on the US Constitution, and when it’s broadcast in May you’ll be able to see Gary (and me) in action on the gun range, and hear his arguments for why the US Government shouldn’t be able to regulate the manufacture and sale of weapons within a state. But during our day together, and after, I engaged Gary in a conversation on gun control. Gary, unsurprisingly, is not in favor of legal restrictions on gun ownership. He believes, profoundly, that an armed society is a safer society, and in an email to me, talked about how important it is for all the “good guys” to have guns, and know h0w to use them properly and safely, in order to defend themselves and others from the “bad guys.”

That division, between the good and the bad among us, is what underlies most of our talk, and a lot of our legislation, about guns. We can’t pass restrictions on gun ownership, we are told, because “law-abiding gun owners” would suffer, while “criminals” would, of course, ignore the laws against gun ownership in the same way they ignore the laws against robbery, rape, and murder. I live in Chicago, where we have no shortage of “bad guys” with guns, and yes, it’s hard to imagine they’d be stopped by laws banning their ownership of guns. They haven’t been so far.

But I thought about this reading the New York Times‘ coverage of the shootings in Newtown. Time and again, they referred to the actions of the “gunman.” This is understandable. He is a man with a gun. And it would be horrifying if they were gone by standard New York Times style, and refer to a “Mr. Lanza” repeatedly as he murdered 20 children and six teachers.

But that term, “gunman,” is the first, mild term on a spectrum of alienation that leads down to “monster,” “coward,” “face of evil,” any and all of which might make us feel better as we loathe and scorn Adam Lanza, and reject him from human society, but it’s also is a way of reinforcing that “good guy/bad guy” dichotomy. You hear it now, from Rep. Louis Gohmert this morning on Fox News, and you will hear it more in coming days: we will have no choice but to arm the good guys because there’s no other way of stopping the bad guys.

As far as I know — and you should take everything in this post to be “as far as I know” — Adam Lanza had no criminal record, no record of hospitalization for mental illness, nothing that would have prevented him from legally owning all the weapons he used Friday. And since he didn’t actually own them — his mother did — let’s use other examples. Until the moment he grabbed his gun and killed his girlfriend, Jovan Belcher was a law abiding gun owner. Until the moment he shot Trayvon Martin, so was George Zimmerman. So was James Holmes until he opened fire at the Century 16 movie theater in Aurora, Colorado. So was Jeffery Giuliano, the Connecticut retired cop who shot and killed his own son, thinking him to be an armed intruder. Actually, Mr. Giulano still is a law-abiding gun owner — no charges were filed.

I have no wisdom, and no prescription, and no advice as to what we as a country — who have decided, collectively, through our laws and our elected representatives to make access to guns ever and ever easier — can or should do now. I just make jokes on the radio about less important things. But I feel it’s important to remember: the villains, the bad guys, the ones we have to be afraid of an arm against, are, to a greater extent than we like to admit, ourselves.

There is no doubt at all that Chinese demand for physical gold is having, and will continue to have, a huge impact on global gold flows and on the supply/demand balance, but making sense of the various figures quoted by the media is difficult and often counter-intuitive.

For the serious follower of gold, perhaps there are two statistical analysts whose handles on Chinese data should be an absolute must to follow as they look far deeper into the statistics that are available to view – the Hong Kong net gold import figures into mainland China and the withdrawals from the Shanghai Gold Exchange (SGE) – the true indicator of Chinese physical gold demand. SGE figures are published weekly in Chinese so tend to be ignored by most of the global media while Hong Kong gold import/export figures are released monthly (in English) and are seized upon, misleadingly of late, by the press as a proxy for what is actually going on in terms of total Chinese gold demand.

 Two of the best statistical analysts for understanding what is really going on in Chinese gold demand are Netherlands-based Koos Jansen, who has his own website ingoldwetrust.ch, but nowadays writes mostly for Singapore gold dealer bullionstar.com, and Australia’s chart king, Nick Laird, who again publishes his data on his own site sharelynx.com, and many significant gold-related ones on goldbroker.com. Do take a look at these sites for an understanding of what is actually happening now in terms of Chinese gold demand, as ever since the second quarter of the current year Hong Kong import/export statistics have become further removed from being a true indicator of Chinese demand and imports. This is because the Middle Kingdom has hugely eased the path for gold to be imported into China through other ports of entry which are now handling the major part of the country’s gold coming in from abroad.

This becomes hugely apparent if one views Nick Laird’s latest chart showing Hong Kong net gold exports to China, SGE withdrawals and the ratio between the two. As can be seen from the chart (shown below) from the period between mid 2011 up to April of the current year there was a strong correlation between the two main sets of statistics, but for the past four months the two sets of figures have drifted hugely apart as the new gold import routes have opened up. As the chart showing the correlation between the two shows, Hong Kong net gold export figures into the Chinese mainland are currently running at only around 15% of SGE withdrawals and falling – yet still some of the mainstream media has taken these falling Hong Kong figures as a direct indicator (and a very misleading one at that) of an enormous drop in Chinese gold demand.

If one looks at SGE withdrawals on a month by month basis, it is also true that these do show a mid-year decline in Chinese demand – but not by nearly as much as a reliance on the Hong Kong figures would suggest – with a climb back to around 2013 demand levels in August, and from data picked up by Koos Jansen (and no doubt by Nick Laird too) this demand has been accelerating. For example the latest available weekly withdrawal figure from the SGE was a very large 44 tonnes, following on from an even larger 50 tonnes the previous week. These figures were immediately ahead of China’s Golden Week holiday so will probably have been distorted higher but taken with the prior weekly figures the indication is that total Chinese SGE withdrawals during September will have been around 190 tonnes plus. This, of course, equates to an annual rate of over 2 200 tonnes. This annual level will not be achieved in 2014 due to the weaker mid-year demand, but is an indicator that full year Chinese demand remains at a very high level indeed and the gloomy mainstream media talk of a 40%-50% downturn this year should be taken as absolute rubbish. At current demand levels – and the final quarter of the year tends to be strong in China – we are looking at perhaps as little as a 10%-15% decline from the huge 2013 record.

But how much should be read into these figures in terms of likely gold prices ahead? In 2013, for example, the gold price fell back sharply despite the huge demand from the East and Middle East. This was primarily because of the very large outflows from the gold ETFs which primarily took place in the main gold price-setting markets of the West. This year Eastern demand may have fallen back a little, but has picked up strongly in the past few weeks, and although we have seen some gold liquidations out of the major ETFs in the West this has been nowhere near on the scale we saw a year ago – indeed in some months the ETFs have actually seen small inflows.

With the latest Reuters reports of rising gold purchasing in China and India again – the two biggest global markets for gold – and increasing gold premiums in both countries over and above the London price – we could well be poised for a significant turning point in the gold price based on fundamentals at least. By all accounts gold mine production is peaking while demand still continues to rise and gold supply, which is calculated by precious metals analysts Metals Focus as having been in deficit last year, could be heading that way again this year too.

There is considerable geopolitical turmoil in the world which has to boost safe haven demand, at least in some areas and it is becoming increasingly apparent that the global economy is not recovering as fast as many had hoped. The US Fed is getting nervous about the idea of allowing interest rates to rise, while the Eurozone is looking at more Quantitative Easing.

All these factors might be seen as positive for gold, and all things being equal would probably lead to a sharp rise in the gold price in the months ahead. But then all things are not equal. The western commodity markets are hugely distorted by the big money playing the futures market with amounts of paper gold enormously in excess of physical gold availability perhaps by as much as a factor of 100 or more. Should market participants start demanding settlement in physical gold there would be a massive increase in gold price and undoubtedly some of the big short position holders would be bankrupted. But, unfortunately for the pro-gold sector, this seems very unlikely to happen.

However there has also been a move in the East to set up new international commodity exchanges which will deal only in physical metal – notably in Shanghai with the international arm of the Shanghai Gold Exchange (SGEI) located in the Shanghai Free Trade Zone, and in Singapore with the Singapore Precious Metals Exchange (SGPMX). There are also reports that CME Group will launch a physically deliverable contract in Hong Kong later this year and in the Middle East, Dubai is said to be preparing to launch a physical contract too. The effect of these new trading options will be limited initially, but as they gain traction and physical gold continues to move from West to East, which shows no signs of coming to an end, then there could be some dramatic gold price moves ahead in the medium to long term.

If GoGold (TSX:GGD) keeps to its aggressive – and so far pretty accurate – mine-building plans in Mexico by the end of next year there will be a new gold-silver junior producing, on an annualized basis, nearly 2-million ounces silver-equivalent from one mining project and 56,000 ounces gold from another.

GoGold has recently said that it is on track for full production later this year at its Parral silver-gold tailings project – where it is reprocessing tailings that hold some 35 million ounces silver equivalent in resources – and that numerous aspects of the project from recovery, cyanide consumption to grade reconciliation were turning out, at least so far, better than expected. Here, at full production, GoGold expects to produce 1.2 million ounces silver and 11,000 ounces gold a year, on average, over a 12-year minelife at, net of gold, $6.48/oz Ag in cash costs. By the looks of things so far, it may beat that score.

To this looming production, GoGold has outlined the potential of the Santa Gertrudis project. Recall that GoGold picked this up earlier this year after a takeover of Animas Resources. At Santa Gertrudis – a past producer that failed amidst low gold prices in the early 2000s (i.e. ~$300/oz Au) – GoGold expects yearly production of 56,000 ounces gold over a 12 year minelife. This, like Parral, will be a heap leach operation, but involve actual mining rather than re-mining, with total costs projected @ $622/oz gold. The operation, as set out in GoGold’s preliminary economic assessment, an outline of which the junior released today, is built around multiple open pits that hold about 22 million tonnes in indicated resources @ 1.06 g/t Au in oxides. Assuming $1,200/oz gold GoGold estimated a 53.5% internal rate of return (IRR), after tax, though it headlined 57.8% IRR at $1,250/oz gold, which not so long ago might have been deemed conservative. Not today with gold dipping under that count.

At any rate, the economics as set out are not pie-in-the-sky. The project appears to hold up at much lower gold prices as well, with IRR dipping to a still strong 34 percent at $1,000/oz gold. All this asssumes a strip ratio of about 6:1 and a capital cost of $32 million.

GoGold has set mid-2015 for production at Santa Gertrudis. Couglan told Mineweb he expects permitting on the brownfield’s project to take three months when it starts. If it holds close to that forecast then next year there will be a serious silver-gold junior/intermediate to contend with among gold-silver producers with important Mexican operations, joining the ranks of Argonaut Gold, AuRico, Fortuna Silver, Endeavour Silver and Gold Resource and others. If the plans hold true for GoGold, or at least near to, I would expect GoGold garners quite a bit more attention from the market. GoGold is not exactly flying below the radar – it’s marketcap is over $200 million which for a pre-commercial/ramping up gold producer can’t be sniffed at this days – but then again it will certainly gain greater scrutiny – and possibly respect – with two modest-sized silver and gold mines in production with very decent mine life (for a junior) and low costs on the horizon assuming a plus-$1,000/oz gold world.

Parral’s timeline, for the record, has come close to company projections. Back in mid 2013 GoGold co-founder and President and CEO Terence Coughlan told Mineweb to expect initial production in early 2014 after it received financing from Red Kite and CAT to build the mine. It would, in fact, come a bit later – June – so not quite early 2014 but very close nonetheless. It’s impossible to say if the same fairly accurate scheduling will hold true at Santa Gertrudis, but it can be said Coughlan and GoGold’s other co-founder, Brad Langille, are pretty steady hands at Mexico mining. They have been key backers of several other mining endeavours in Mexico that have sold for substantial sums over the years, including Gammon Gold, Nayarit Gold and Mexgold.