With production target for gold producers not being met. This bodes very well for the POG going forward. A diminished supply is just another fundamental reason the POG should head considerably higher. China just purchased 315 tonnes of Au. It should be a matter of time before gold is back over $1700 and on its way to $2000+.

UPDATE 1-Goldcorp lowers full-year production outlook

* Operational issues at Red Lake, Penasquito hit gold output

* Sees 2.35 mln-2.45 mln ounces in 2012, down from 2.6 mln ounces

* Silver output 30 mln-31 mln ounces, down from 34 mln ounces

July 10 (Reuters) - Goldcorp Inc revised its 2012 gold production outlook lower on Tuesday due to operational problems at its Red Lake mine in Ontario and its Penasquito mine in Mexico.

Canada's second-largest gold miner said it now expects to produce between 2.35 million and 2.45 million ounces in 2012, down from a previous estimate of 2.6 million ounces. The company's second-quarter output fell slightly to 578,600 ounces, compared with 597,100 ounces in the year earlier period.

"We are disappointed with reducing production guidance due to operational issues at our two most important mines," chief executive Chuck Jeannes said in a statement. "Our focus is on addressing these issues promptly and in a manner supporting the long-term opportunities at these key assets."

Total cash cost guidance was revised down $310 to $340 per ounce of gold on a by-product basis, compared to a previous guidance of $250 to $275 per ounce.

The Vancouver-based miner also revised its 2012 silver forecast to 30 million to 31 million ounces, down from a previous estimate of 34 million ounces.

Goldcorp is facing a water deficit at Penasquito, in the Zacatecas state of Mexico, which has limited plant throughput at the mill. The company is drilling wells and looking to increase the volume of water reclaimed from its tailing facility.

Penasquito is now expected to produce some 370,000 to 390,000 ounces in 2012, compared with previous guidance of 425,000 ounces.

At Red Lake, Goldcorp's top producing mine, 2012 gold output is now expected to be 460,000 and 510,000 ounces, compared with previous guidance of 650,000 ounces. Work is under way on previously announced de-stressing cuts to the rock.

The company, which owns projects throughout the Americas, maintained its production outlook for its other mines.

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