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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 387.19-0.7%Dec 2 4:00 PM EST
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To: Maurice Winn who wrote (76415)7/16/2011 10:27:46 AM
From: Hawkmoon  Read Replies (2) of 218149
 
Production cost is about $300 an ounce. Retail price $2000 an ounce. That is a big gap.

I would agree.. And it's one of the reasons I find gold mining to be a misplaced diversion of economic resources that could be better invested in productivity enhancing technologies, or R&D.

There isn't much difference in the Fed printing money, or the Gold miners printing money at $300/ounce average production cost.

And given this disparity, there is strong economic incentive (profit) for mining companies to explore and mine even more of the stuff.

And since China is the #1 producer of Gold, this becomes a new source of foreign revenue for them, as well as a means by which they can reduce pressure on their own currency by encouraging Chinese to own the gold that the state gold mining corporations are producing.

And then there is the economic cost to those industries that rely upon availability of gold for use in their circuits.

Hawk
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