If you count "fort Knox, I think that the CB still have 20,000 tonnes (from memory), they agreed to slow down the dump since the POG was getting under production cost and there was a danger that SA may be "cut out" (they already went from more than 50% of gold production 20 years back to less than 25% recently). You must remember that in the early 1990, a small revolution in gold production occurred allowing extraction from very low grade ores, opening a vast potential future supply. Like any other commodity, the gold equation is, in the long run, determined by supply-demand factors, and above $330/ounce, the factors are not very bullish. Major inflationary pressures (which I do not see right now) could increase the equilibrium somewhat due to increased costs associated, but I do not think this is a major factor for the next 18 months, the major factor, IMTO, will be the strength, or lack thereof, I should say, of the dollar. By the way, I owe that tenet to an old cyberfriend which I am sure you have met in those hallowed halls of gold country (Sennet).
Zeev |
