Rono's point is well made - I think gold will continue to climb. It will be above $800-ish for a long time. IMHO, the only thing that will reverse it is fiscal wisdom and responsibility by our fabulous Congress and President. They would have to balance budgets and practice "strong dollar" economics. Anybody think that's gonna happen anytime soon ?
900 fine: I believe that gold is going to go up, unless it drops. Then again, it may remain the same.
A link to what auction? i dont have any for gold ongoing, i was just giving the other fellow a way to sell his fast
Point well taken, Sam. However, with gold seeming to be locked in this trading range, I'd still be very surprised to see it break down significantly and think that when we look back at it a year or so from now, this range will still represent the low. I'd caution against waiting for it to come down much so that someone could do some buying. but, I've been wrong many times before and will surely be wrong again. peace, rono
Thanks As the bullion prices rise it not only prices people out, but the effect of that is a reduction in the interest in collecting such coins. That is where the coin collecting aspect really suffers. There will be exceptions for the high rollers and extremely popular examples like a high relief St Guad, but as a desire for a collectable piece of art and with regard to the dymanics pented demand for nuimastic reasons, that really starts to evaporate for common gold coins, even the classic Roosevelt designs as raw material costs continue to rise. I'd be very concerned at this point about buying any gold coin for much more than bullion value. Ruben
Why do people always talk about demand and don't even bother looking at the supply chain??? Gold prices can't keep on going at this absurd rate. The only group who benefit is the mining companies. Rio Tinto and Ivanhoe mine has discovered a huge gold-copper mine in Mongolia called Oyu Tolgoi coming online in 2010 with an estimated 7+ million oz gold and 9+ billion pounds of copper with the potential of up to 30 million oz of gold. There is also a fair amount of new gold mines found in China such as Xinjiang, Jinfeng, Jinshan, etc and that's just Asia. Africa has more gold mines than mentioned.
Because these mines are a blip on the world gold supply and will not come close to making up for increasinging industrial demand.... You know, use it ONCE and toss it out. Ruben
Even if they get the entire 30 million ounces out of the ground over the next 15-20 years, at $800 per ounce that still only $24billion spread out over a couple of decades. This sort of thing doesn't even show up as a rounding error in the global economy.
I mean really. What the heck is 24 billion dollars? It might not even be worth mining. Lipitor had World Wide sales last year of over 10 BILLION Dollars.... ONE DRUG. Sometimes I wonder if people have even the vaguest concept of the world around them.
But one can't compare that new gold to the ENTIRE world economy... only the gold PORTION of the world economy.
By that logic, Lipitor is not worth manufacturing ! What the heck is 10 billion dollars ? Of course they will pull 24 billion dollars worth of gold out of the ground. Who wouldn't ? And that increases the world supply of gold. But your point is well made - it increases supply, but by how much ? Does anyone have any hard numbers ?
Even using your method, which is flawed, consider that the European Central Bank by itself already holds 356million ounces of gold. And that's a small fraction of holdings by all central banks, which is only a fraction of the total gold in the world. So 30 million ounces is a tiny amount of gold, maybe a couple of percent of the total.
http://www.fgmr.com/gold.htm I'm coming up with roughly 3 Billion+ ounces of gold in above-ground stocks (as of '96). 30 million ounces would be approximately 1% additional supply compared to the TOTAL of above-ground stocks. Doesn't sound huge, but a full percentage "extra" is kind of a big deal actually. Then again...what's the total increase in supply AND demand over that time period....
It's really not so much that the price of gold is going up as the US$ is dropping. Look at the way the dollar has dropped against other currencies and you should see where this Gold rise is going. Last I looked at the price of gold in Euros, it was a pretty flat chart.
so, using your calculations, if I add my gold holdings to the 356 million ounces (in the Euro Bank) then there would be, um: 356,000,000.01 ounces. Huh?
EXCELLENT point. I've been trying to find the hard data but couldn't get a one-year chart of gold price in Euros. In one year, Gold has increased $127 USD, or 27%. Does anyone have the one year price change in Euros ? My guess is it has gone up significantly, but less than the rise in USD. That will help us decouple two intertwined issues - the rise of gold due to it's intrinsic value increasing, and the rise of gold due to the drop of the USD.
