On 10 Sep 2001, at 6:13, David Hillary wrote:
Hello David.
> Gold stocks are like any other inventory, something which can be
> increased by investment (surplus of production over consumption).
Gold, unlike most other products, is not consumed for the larger
part. It is accumulated (saved) in the form of jewellery, gold bars,
coins. Most of the gold produced since man-kind exists is still
available and held by someone as a store of value.
Annual production and demand are not relevant when it comes to
determining the long term price of gold. At best, they are only short
term influence. The reason is because of a very large above ground
inventory that is at least 40 times larger than annual
production/demand numbers. The past decade saw a steady
annual deficit which was covered by gold dumped on the market by
various sources holding inventory including mostly central banks
and bullion banks playing the "gold carry trade".
Claude
http://www.goldcurrencies.ca
http://www.ormetal.com
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Claude Cormier Public Key
http://www.ormetal.com/keys/ClaudeCormier.asc
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