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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: t4texas who wrote (93545)8/12/2001 7:44:11 PM
From: Tommaso  Read Replies (3) of 95453
 
See later post on the thread:

"Cheap black labor was used during apartheid to tunnel miles underground, shafts that now lead to cash
costs that are the highest in the world -- around $221 an ounce. South African miners are struggling to
compete with those in Australia and North America, where costs are as low as $180 an ounce, according to
Gold Fields Mineral Services Ltd."

Message 16201031

That figure of $180 an ounce is my argument for why gold is unlikely to rise very much in price. If you can produce something and sell it for an immediate 50% profit, you produce to the limit. And the technology is there to bring prices of production even lower.

Years ago I deluded myself that gold producers were the perfect investment. It took me some years gradually to realize that except in times of war and under conditions of extreme inflation, this incentive to produce more gold automatically put a limit on the price. it's even more obvious than with the cyclicality of oil and gas; in the case of oil and gas, the product is consumed and there is less and less of it. Little gold ever goes away once it is mined.

Now because of anti-gold speculation, there could be a sharp short covering rally. But if you think that way, silver is the place to be. Silver is actually, to some extent, consumed, and the stockpiles of silver are all gone.
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