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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 362.31-1.8%4:00 PM EST
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To: maceng2 who wrote (44367)12/27/2008 3:45:17 AM
From: energyplay  Read Replies (2) of 217537
 
I really like your simplified formula, because the $400 base factor is probably equal to the median marginal production cost for gold for most established mines.

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A simplified version could be

POG = $400 plus 320* eur/usd. POG goes above $1000 when eur/usd>1.9

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I expect that one of the major drivers of the marginal production cost of gold is the price of oil, which has dropped a lot in the past 6 months.

This might imply (note hedge words here) that we won't see strong movement in the gold price until the price of oil stops dropping and gets back up, at least in the high $40s or low $50s.

Which is also a way of saying we won't see a strong movement in the gold price until deflation stops getting worse.
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