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

To: Rarebird who wrote (57256)	8/13/2000 2:21:47 PM
From: Hawkmoon	Respond to of 116943

Interesting graph Rarebird. And while it makes sense, I would opine that they overlooked one aspect of the reduced sales of gold. Much of the gold sales over the past years have been due to gold being so extremely overvalued since its gap up to $800 back in the early eighties which required relatively minor net increases in gold purchases by CBs. However, looking at 88 onward, we've seen tremendous gold selling into the strength of the POG, probably due to it being seen as extremely overvalued, as well as a means of adding additional strength to individual currencies that more properly refect their underlying economic strength and fiscal policies (predominantly the US dollar as gold was sold and dollars purchased). Now we're back to seeing gold priced close to its production cost and naturally we should see gold sales reduced since at this point excessive sales of gold could threaten to send the POG below the cost of production, further disrupting market equilibrium and artificially increasing the value of the dollar in comparison to gold. When the US went off the gold standard, and OPEC put the screws to the western economies, the combination of the two factors, as well as poor economic policies by US leadership, business and political, it sent the POG skyrocketing vs the dollar, creating tremendous market distortions in precious metals. All we've been seeing over the past 10-15 years is reassertion of market equilibrium. But it will be a long time before we see Central Banks engage in net increases of gold, failing some major shock to the economic system from natural disaster, or someone setting off a couple of nukes in the mid-east. But that is a great reference chart. Regards, Ron