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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (36315)	7/2/1999 8:46:00 AM
From: Hawkmoon	Respond to of 116762

It becomes clear you have never looked at the balance sheet of any of these producers. A great many produce very big volumes of silver! Fine Richard... So I guess you're essentially stating that these producers are well diversified and thus can handle the adjustment in the price of gold to the downside. I applaud them. So as gold reaches for its market equlibrium price where industrial demand is matched by production (with any peak in demand an opportunity to sell CB gold reserves), gold will trade according to its commodity status. But it will be ugly for producers, Richard. Absorbing the excess supply of gold into the market will have results similar to what the oil drillers suffered as an oil glut hit their market, requiring production cuts to prop up the price. That glut in oil was devastating for the oil sector, turning boom into bust all over the world, Texas being a prime example. Gold may find an equilibrium price somewhere in this range someday (depending on productivity improvements that lower production costs averages). But as oil discovered, sometimes the price falls below the cost of production as producers vy to "beggar thy neighbor" and capture market share. This will eventually happen in the gold market (minus a major crisis of global confidence or outbreak of war). Nations at war cause people to flee to hard assets of many kinds, gold being only one of them. So if you're a goldbug.. pray for war. Btw, given the recent comments by Jiang Zemin in Bejing, the capitalist experiment in China may be ending and a return to marxist oppression arising. Everyone is pulling away from China for now, until it becomes more sure just what their game is. Regards, Ron