Gold supplies have been rising in the past several years and peaked at 3,155 tonnes in 2015. Global gold production is seen to drop 3 percent in 2016, which means prices could go up substantially.

Business Insider reported that the drop in gold production is caused by the decline in gold prices, which went down lower than 40 percent from its highest levels in 2011. Miners minimized their investments in new gold ventures since they deemed it less profitable. GFMS precious metals demand manager Ross Strachan was quoted saying the output fall this year is expected to happen "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."

In a report by CNBC, giant gold mine firm Barrick Gold president Kelvin Dushnisky said, "Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook." Gold is clearly under pressure, even by the Feds interest rate hike last month, but this is not all bad news as gold prices went up 2.7 percent in 2016.

The slight increase happened amidst falling stock markets all over the world. This only shows that gold is a haven during times of economic crisis.

Heads of major gold companies believe that prices of this inert metal will increase this year, according to Mining. Polymetal CEO Vitaly Nesis said he puts his faith in a "recovery driven by reduction in supply and I believe we will see the first signs of impending recovery in the second half of this year." Barrick Gold president Kevin Dushnisky said, "Falling grades and production levels, a lack of new discoveries, and extended project development timelines are bullish for the medium and long-term gold price outlook."

To sum it all up, with less gold production, and more demand for the precious metal, it is highly likely that gold prices could surge this year.