Gold mining in many sectors are on it knees, it couldnt sustain $800 per ounce, mining would cease Would you make or dig something up and sell it at below cost price?
If mining/recycling would stop, the governments banks have stocks sufficient to replace the mining/recycling supply part for abit over a decade. And there is also some 4 times higher stock in private hands. So there is enough gold to meet over a half century the current industrial/investment demand. And most of it is recycled due to the high price relative to other prices. An annual production is 2500 tonnes. The world stock is 70 times such an annual production. So we can easily do a whole decade without any gold mining, it only needs 1/7 of current owners willing to sell at current price. Much like the miners have to do anyway
But would the Gov banks sell? I would think supply issues would mean they'd only be more keen to keep a firm hold on their gold stockpile.
I think the point Alessio is trying to make is that the POG (like house prices or anything else) is linked to what people can pay, not the cost of production etc. If people have less money to pay...either the POG comes down or it doesn't get sold at all.
We all know that the CPI is a lie and if you bend the truth one year then next year you have to bend the truth further to get the same effect or you will show the lie of the year before. The CPI is a compounding lie and is hence why every year new ways of lying needs to be invented. So a graph of the CPI is nothing more than a compounded lie, I would except any ratio against the CPI to be creeping higher and higher away from reality as the effect of the compounded lie effects this unit of measure. Probably at a similar rate of historic interest rate decay or exponential currency expansion. There are ONLY two important factors to determine the long term price for Gold and Silver would be (#1) What does it cost to produce (#2) What is someone willing to pay for it
I'm thinking gold will bottom shortly after the US actually do begin tapering there QE, not just talking about. Then I think it's reasonable to expect there will be a flight from equities into precious metals, which could be perceived as being good value at that time. Thoughts?
Generally I believe that to be true though what makes sense doesn't always pan out in the real world spot. As for the important factors, investor demand in paper gold has a greater bearing on gold price than physical demand. What can drive paper gold values lower? Competing assets being seen by investors as more valuable...more worth investing big $$ in rather than gold. This is what I believe.
If that world stock was not sold during the last 15 years when gold when from under $300 to over $1900 then to under $1300 then what will it take for that 70 year world stock to be offered willingly up for sale? According to the World Gold Council the yearly global supply is about 2500T from mines and 1000T from recycling 'we buy gold' shops. If gold falls to below $800 then the mines and gold buying shops will almost stop doing business? Rastani's analysis is very good and I believe him and all the other technical analysts, the gold price is going to $800, what's next? We may see a situation where paper gold investment is readily available at $800 but as little as 10Kg of physical gold is almost impossible to acquire. Let's just have a global gold market that only exists on paper, Perth Mint paper gold kangaroos won't have much weight but they will still be as real as an ounce of gold on paper.
All depends on what the 'manipulators' want to happen for there own evil ways. Maybe they want to try and scare everyone into selling? At least all of us here are too smart for that to work....we will all be stacking as much as possible at $800..
This Alessio Rastani needs to go look up what "Logical" means before saying it. I think Gold will keep trading lower as long as more physical gold is being sold then purchased by the public. Jim Rogers made a good point saying that most mines are willing to run at a loss for some time before shutting down. This is the same with most company's.
The problem is that most miners have been running for a while at a loss. The other problem is that the market is being flooded with leased gold not owned gold and when the time comes to return that gold we get the mother of all shortages. You tell me when that will happen ?
Leased or not, i don't think the elite care how they get the gold. As for timing i have no idea, but if i had to guess ill say late 2014.
Anyone know where I can buy a working crystal ball? All this endless speculation is upsetting my stomach. .
Your guess is as good as anyone else's. I don't think this discussion is speculation. It is fact what we are unsure of is the timing. Is it 2014, or 2015 or ? But happen it will.
That's what they did during the decades between the nixon shock and 2011. Over the period 1997 - 2010 central banks sold 5681 tonnes to the market. 2005 had over this example period the highest sales with 663 tonnesn 2006 370, 2007 484, 2008 236, 2009 30, 2010 87 and then they became net buyers. Isn't it obvious? They sell gold when speculator demand is longterm low, to keep price low, as to punish those that want to sell gold for the stuff they really wanted, inflicting them less FIAT. They buy gold when speculator demand is longterm high, to keep price high, as to punish those that want to buy gold with their FIAT, inflicting them less GOLD. Central banks do the opposite of what speculators try: sell low and buy high because they want is to punish those that attempt to evade their theft along FIAT. Imagine that the central banks hadn't sell those 5681 tonnes during the last 15 years, the gold price trend would have rewarded those that bought and kept gold after the 1980's crisis. With the sales, those speculators can complain about a two decade flat price. That's why.
