Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Don Lloyd who wrote (14759)	2/10/2002 11:09:02 PM
From: AC Flyer	Read Replies (1) of 74559

Hi Don: My interpretation of the data that I found is that the $280 to $320 band is "reasonable" based on output increasing at 3.5% to 4% annually and projected depletion of current mines. However, it really does not take into account the demand side of the equation. It is always possible that market psychology will cause a "run" on gold, so to speak, with a corresponding POG price spike. What mitigates against this, in my opinion, is the fact that the POG has been very well correlated to average production cost for the last ten years and also that any move to the upside will be met by extensive forward hedging by the producers.

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