The SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and other gold ETFs are performing well to start 2018 and the yellow metal could soon deliver more upside. Like any other commodity, gold can be responsive to supply and demand dynamics. On the supply side, things look encouraging for the yellow metal.

“Bullion prices are set to climb because there’s been a lack of exploration and the global industry isn’t replacing the reserves it’s been mining, according to Stephen Letwin, chief executive officer at Iamgold Corp.,” reports Bloomberg.

GLD is the largest physically backed gold ETF on the market, providing investors exposure to gold price movement in an easy-to-use investment vehicle. The ETF is backed by physical gold bars stored in London vaults. The gold trust currently holds about 27.2 million ounces of gold, so each SDPR Gold Shares represents fractional ownership of the underlying gold.

Related: The Stars Be Aligned for $1,500 Gold

Lack of Gold Mining

Some market observers believe peak gold mining has already been reached or will soon get there, indicating supply of bullion could soon start declining.

“The producer-funded World Gold Council has estimated that world supply may have peaked, while Frank Holmes, chief executive officer of U.S. Global Investors Inc., said this week that mine supply topped out in 2017 or will do so this year,” according to Bloomberg. “Combined with understated inflation and strong demand from China and India, this could help boost prices to $1,500 an ounce by the end of the year from about $1,327 now, according to Holmes.”

Showing Page 1 of 2