> Gold production has been in a deficit for how long now?
Every metal is in a production deficit, it's just gold where folks make a big deal about it.
> Bank lending has made the diff
Actually, historically scrap has bigger impact than central banks.
835mt of scrap last year versus 556mt of CB sales.
When gold price goes up, one often has scrap sellers in Asian and Indian markets.
Also, in 2002 miners covering hedges really made the big diff
> Jewelry demand can fall a long way off w/o impacting gold price
Can ? Has dropped almost every year since 1997, when it was about 3350mt, was 3000mt in 2001, and really dropped to 2700mt in 2002. If miners had not bought 423mt last year, the demand side would have looked much worse.
Overall, the gap between mine supply and demand is smaller than it has been in years. Folks are still throwing around old obsolete numbers like 1500mt for the gap, when it was down to 879mt in 2001 and 588mt in 2002 (much easier to fill)
When you include scrap as a supply variable (which is usually done for base metals, other wise you would have folks screaming about the aluminum mine/demand gap), a more realistic gold deficit would be 173mt in 2001 and a surplus of 247mt in 2002.
Again, it was a good thing miners purchased gold to soak up the excess ;)
Before I get called a bear, I'm VERY bullish on gold in the long-term ($500-600 by 2007 for reasons Vi stated, and stronger worldwide economies), but I don't think we are going to get over $400 until 2005. Another 18 months of frustrating sideways performance and failed rallies. I think base metals are going to run before precious. |
