No I have a point: Your linear thinking will get you in trouble, and has. Your logic for the Price of gold falling is a misnomer. The actual price of gold does have a small bases in supply and demand, but the bulk is related to currencies that offset the supply and demand. So in fact you are wrong. And thus me calling my own statement wrong:
1) The FALL in PRICE of GOLD is due to one thing and one thing only... SUPPLY exceeds DEMAND.
You agree with that, I don't!
This statement does not take into consideration growth of an economy, currency growth {or deflation}, monetary supply, monetary policy, or a host of other conditions that have an effect on the USD. So in reality, supply and demand can be taken out of the equation all together. This is the point you miss. The day to day fluctuations are the rebalancing of the supply and demand, based on currencies. But buying demand can be on the increase {as those on GPM thread suggests} and the supply decreasing, but the price can still fall, as the US dollar appreciates. And this is the problem with most "gold bulls" whom are desperately looking for a rise in the POG based on debt, and default in the rest of the world. They are looking at only what they want to see. So when they fail, the call it manipulation.
"EXACTLY, supply of gold HAS exceeded demand for sometime? Hence the price has fallen. The reasons for that imbalance and their sustainability are what is important to determine pricing in the future."
If everything was truly priced in US dollars, you would be partially right. But in this world, GOLD trades in more then one country, and in more then one currency. So the effects and thus the price are more in line with currency fluctuations, then supply and
demand.
"Again, this is another fairly basic concept of economics and functioning of markets... all price movement is based on supply and demand, kiddo."
And yet you don't understand it! Kiddo. You comment is based in a micro-economy. {open to USA only, and doesn't allow for foreign purchases} So once again, you are wrong! And yet you say: "Ho Ho Ho, you're cracking me up again." |
