Precious and Base Metal Investing Message Board

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Gold/Mining/Energy : Precious and Base Metal Investing

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To: d:oug who wrote (665)	11/28/2001 7:22:20 PM
From: tyc:>	Read Replies (1) of 39344

>>supply an example where the following overpowered the supply demand equation used in economics 101 and actually created a situation that while demand exceeded supply the price decreased? IMHO: Perhaps, right now, supply exceeds demand...look at LME inventory levels. But the price has "broken out on the upside". Speculators suspect that the situation may be about to change. They are covering their shorts and going long. If perception changes, the speculators may reverse yet again driving the price down, without any real change in "the supply demand equation". Therefore, to affect the price it is only necessary to affect the perceptions of speculators.

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