George: I don't know whether you have seen this chart by Bob Johnson but, as far as I am concerned, this picture is worth more than a thousand words, even from someone as esteemed as Zeev. goldsheet.simplenet.com In fact, every serious gold investor should bookmark this site.
The graph shows clearly that
1. CB sales account for only a very small proportion of total gold sales
2. CB sales are less than scrap sales and are a small fraction of mine production
3. total gold sales are increasing year by year and in 1998 were more than 50% greater than they were in 1988 (That's a growth in demand of approx 7% pa).
On the basis of this information, it is clear that mine production is the major determinant of the gold price. In fact, in the circumstances and in contradiction to so much that is written, one has to view the CB contribution to the setting of the gold price as relatively unimportant.
Furthermore, there is no evidence to support the contention that gold, as a precious metal or even a commodity, is being progressively "phased out" . In fact, it is the opposite which is true --- demand is increasing all the time, admittedly at lower and lower prices.
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Bob, if you read this, I see it's time to update the chart. Thanks. |
