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

To: Zardoz who wrote (56503)	7/19/2000 5:28:52 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 116834

clearly the inflationary commodity price shocks of the 70's and the Fed's reluctance to curb the money supply growth in reaction until Volcker came along were responsible for the rise in the gold price. your assertion "it had no basis to form a market price on" is meaningless. care to elaborate what that is supposed to mean? gold definitely HAS a special role. it still forms part of the reserves of the most important CB's, and as long as that's the case it has a special role. the XAU remains a buy. or are you trying to say that one day's decline proves anything? the PoG went down as well, nevertheless, the PoG/XAU ratio remains at an historic extreme. Bob posted earlier that if the ratio were to return to its 16-year average, the XAU should be at 74 at current gold prices. the conclusion is that the XAU already discounts a lower gold price and offers therefore a good risk/reward profile. we will eyeball the chart again in a while...

To: Zardoz who wrote (56503)	7/19/2000 5:31:58 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 116834

oh, btw, your assertion that $190/oz. represents fair value is nonsense as well. it costs $350/oz. to replace every oz. mined out now, that's the industry average. all of South Africa's production becomes uneconomical at $230/oz. since there is already a big primary supply/demand deficit your $190 fair price makes no sense.

To: Zardoz who wrote (56503)	7/19/2000 9:28:01 PM
From: long-gone	Respond to of 116834

<<GOLD has NO special role, it hasn't for years. Why should gold be value above it's market price? It's not a good currency hedge, it really only offers limited protection.>> While I don't fully disagree, I'm neither allowed to fully agree due to the laws of rarity & physics. In the purely industrial sense, Gold does some things other materials simply can not accomplish with the same grace or ease. Then, even discarding the traditional monetary usages in our "devolped" world, there is a notable use outside the "mainstream" as money or a medium of barter in these United States this very day.