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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Self-Retired who wrote (90861)4/6/2001 6:47:05 PM
From: NOW   of 436258
 
I love your style of wit!!!
Seriously though, quoting Saville:
"It is important to note that gold supply and gold demand are not driven by the same forces that drive the supply and demand of other commodities. A substantial rise in the gold price would certainly lead to a reduction in the fabrication demand for gold, but gold is accumulated, in the main, for monetary or investment purposes. This creates an additional element of risk for those who would be adversely affected by a rising gold price in that an increase in the price of an investment often boosts the demand for that investment. Just as many investors were falling over themselves in their eagerness to buy Cisco at $80 and now want nothing to do with the stock at $13, those who hate gold at $260 will love it when it breaks above $500. In this important respect gold is very different from every other commodity. As an example, a large rise in the oil price will lead to a reduction in the demand for oil because oil is not accumulated for investment purposes. A rise in the gold price, however, poses the risk of creating an even greater shortage since the price rise will likely stimulate increased investment demand. As such, there may be no way for those with huge short positions in gold to exit their positions gracefully. "
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