Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (14781)	2/10/2002 11:24:20 PM
From: AC Flyer	Read Replies (1) of 74559

Jay: Take a look at the web site where I found the source material. I am surprised that these guys make this stuff available on the web. It is proprietary research for which the original client probably paid well. I think there is a solid case that there is little downside to gold at this point, and that the projected depletion of existing mines will only be replaced by new production if the POG stays around $300. A lower price will therefore be self-correcting as total output will fall as mines are closed and not replaced. 2003 appears to be some kind of turning point, with an end to the secular trend of declining POG due to existing mine depletion. The $64,000 question is will some exogenous event break the strong causal relationship between average production cost and POG that has existed for more than a decade. I can not predict the answer to this question. Others can (or think they can), apparently. We shall see. The most interesting part of the data addresses WHICH gold miners to buy. You have to look at the original material to see this, but it very clearly shows which companies to buy and which not to buy. The #1 buy is Freeport McMoran Gold & Copper, apparently.

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