1)The charts would make easier reading if there were some headings.
2) Your arguments are no doubt very sophisticated - but surely if gold is denominated in US$, and the $US falls gold will rise - other things being equal. 'Ah, yes, you'll say, but other things aren't equal'. But, put it this way, if a Canadian producer extracts gold with a $Can at parity to the US$ and is only marginally profitable - won't he become immensely more profitable if the $Can falls to 68 cents US? That is in fact what has happened not only in Canada, but it S.A., and Australia too - so the decline in the POG has not hurt the industry in these countries at all - because it so happens that the curencies in all of these countries has tanked against the US$, more than the decline in the POG in $US??, and they are receiving as much or more for their gold in local currency terms, while mining costs lag. Isn't this why world production has in fact increased when you'd have expected a lower POG to have shut down mines? |
