> . Issues of technology improvement, supply increases, etc. are only gradual, moderating factors, relevant over periods of 10-20 years
Over the last ten years production has gone from 2023mt to 2569mt, a 546mt increase, which should continue into the future (over 1 billion ounces of proven and probable reserves) The 10 year average CBs sales is 265mt and 10 year average forward sales was 154mt, combined 419mt. The extra primary mine production is a much more significant factor than forward sales and central banks sales combined.
Scrap averages 500mt which also makes it more significant than forward sales and hedging combined. From 1995 to 1997 scrap averaged a 600mt, and culminated with an Asian currency crisis dumping almost 1100mt in 1998 - probably the most significant factor in the gold market in the last decade.
> plunge of the gold price in the face of an overwhelming SUPPLY DEFICIT of over 500 tons
There has always been a supply deficit. Over the last ten years it has been filled by an average central bank supply of 265Mt per year, with a high of 622mt in 1992. There is not too much unusual about the last three years, other than the CBs have announced their sales instead of just sneaking it into the markets. The agreed cap of 400mt doesn't impress me either because it is higher than the 10 year average of 265mt.
> In fact, Bob Johnson makes no mention whatsoever, in any comments on this thread to my knowledge, of the status of these gold loans, and certainly of their relevancy to the gold price. When I asked him directly about these matters in an earlier post, he simply ignored me.
No intention to have ignored you. Sometimes after reading 100+ news releases, answering 100+ emails, updating my website by adding links, updating graphs, etc.. I either don't read SI post carefully or sometimes just look at the headers and skip to the newest ones. If you sent a post directly to me and I missed it, my apologies. I'm lucky I caught the mention of my name in this post to Ken Benes.
Gold loans are probably the fifth or sixth item on my personal list of items that afffect the gold prices. I don't think they are as large as some claim or as significant as other factors that I can more easily quantify and analyze. They may affect the perception of the gold market (fear, greed, conspiracy, collusion, etc..) as much as the real numbers that I do have a handle on. Admittedly, the investor perception of gold market is important, but when I can't figure out the fundamentals, I resort to technical analysis. |
