Richard : I have heard all the reasons and the stories but remain unconvinced.
As I said, my own analysis does not show that gold is unduly cheap compared to currencies. And, if we look at commodities, I'm sure it's not cheap compared to those, either. Of course, compared to equities, especially Internet stocks, it is dirt cheap. But then, gold is a relic of the past and there is no reason why it should be more valuable. All one can do with gold is hoard it or wear it. And it doesn't get used up --- like Coca Cola. And, it doesn't produce the expectations of an increase of earnings.
The argument that gold is cheap means that gold has to be cheap compared to something. What? And, if it's expensive, there has to be a reason for that, too. The price of gold cannot go up just because it's gold and because we say it's worth $500! Or that it's about time it went up. (Which it probably is!) And because the gold price isn't what we say it should be, ergo--therefore someone is conspiring to keep it cheap.
If large gold owners wish to lend it to sell, or sell it straight, it is their free choice to do so. If they are selling it for less than it's "worth" then someone is getting a bargain. Short sellers have to buy in, eventually.
When the dollar is the strongest currency in the world, I just cannot see why the US government is conspiring to depress the price of gold. That would mean they are trying to make the dollar even stronger. To do that, they just have to tweak up interest rates.
If the POG were to rise, for example, the capital gain for certain people would be miniscule campared to the gains already achieved on the stock market. So, spite surely can't be the reason.
To keep POG down to skew inflation data makes no sense when the economy is so strong.
Sorry, I just cannot see why the government would specially want to depress the gold price. OK, some institutions were short and wanted to buy in --- but that happens every day in every thing that can be bought or sold.
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