Oh, you want an actual number, not just a generality: <the dead cat bounce and fade shows that's not the case and that this is the real thing. Gold bugs will be thrilled at the low price and will buy. But they will run out of money before the gold supplies run out. There won't be any greater fools to drive the price back up. > I thought that was a near-enough prediction.
But good idea, let's play.
As explained over the last couple of years, the volatility in gold price is a function of the volatility in political processes which are functions of the problems in government cash flow which result from people in government paying themselves big heaps and taking more and more loot for themselves and their electorates who are comparable with drug addicts and drunks.
Then there are things like Egyptian bankruptcy and looming catastrophe because Islamic Jihad is a lot of fun but doesn't actually grow crops or enhance trade with infidels and blasphemers. Stoning potential customers to death is not good for business.
TJ is about to start production of shiny new bars of gold in a day or two with a production cost of some $500 per ounce. Even at $1300, that's a pretty good profit margin. He has obviously put the frighteners on the markets with hordes selling hoards in preparation for the effect of TJ's gold hitting the market. But they missed that it will not be going on the market but will instead be going into storage after quantum tunneling via financial relativity theory to vaults in Hong Kong [by selling it in Oz and buying more in Hong Kong to replace it].
Joking [about TJ's production being scary] aside, there is a lot of the stuff being produced and somebody has to buy it and store it in another hole in the ground, earning no income from it.
RankCountry/RegionGold production (kilograms)|
| World | 2,700,000 | | 1 |  China | 370,000 | | 2 |  Australia | 250,000 | | 3 |  United States | 230,000 | | 4 |  Russia | 205,000 | | 5 |  South Africa | 170,000 | | 6 |  Peru | 165,000 | | 7 |  Canada | 102,000 | | 8 |  Indonesia | 95,000 | | 9 |  Uzbekistan | 90,000 | | 10 |  Ghana | 89,000 | | 11 |  Mexico | 87,000 | | Rest of the world | 847,000 |
Supply and demand seem to be in a reasonable sort of balance. Volatility has been a bit busy with Cyprus, Greece, Ireland, Iceland either resolved or going that way. Italy, Spain etc still have to be sorted out. Japan can just carry on forever [but with fewer overseas holidays and more visitors to Japan enjoying lower prices]. The USA can do like Japan. Americans are becoming accustomed to a reduced lifestyle involving food stamps, mortgagee sales and lower paid service jobs with smaller engines which don't guzzle so much gasoline.
Sell in May and go away. Maybe in April to beat the crowds.
We can coast through this year without armed insurrection in most of the world. So gold should bumble stumble along, fading somewhat as reality dawns that hyperinflationary warp speed takes a lot of energy to get to in financial relativity theory [as it just in regular relativity theory].
30 June 2013 $1,317
Mqurice |
