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

To: Bob Dobbs who wrote (58002)	9/8/2000 11:01:00 PM
From: goldsheet	Read Replies (1) \| Respond to of 116753

> Those behind fiat (reflecting the vast majority in society) are smug and assured while those pro-gold'ers are resigned, sheepish, and all too few. I bet you can not tell which category I an in based on my posts. I have a long-term philosophy (pro gold standard), but I am not so dogmatic about it I won't change my mind short term to make money. There are times to be pro-gold and times to be anti-gold, but if you only stick to one side you will lose 50% of the time. I learned decades ago I can't tell the gold markets what to do. I have to look at them as they are, not how I wish they were, and make the best analysis and decisions I can. > As you can see the correlation between dollar price and POG is strongly negative but not 1:1, which is to be expected. Looks that way on a graph, but when you actually do a regression with 15 years of data you get: Regression Output: Constant 116.404 Std Err of Y Est 7.886 R Squared 0.121 No. of Observations 3748.000 Degrees of Freedom 3746.000 X Coefficient(s) -0.059 Std Err of Coef. 0.003 > The deciding factor is the psychological component of what buyers and sellers believe is gold's intrinsic worth simultaneously in the market. Interesting to note most buyers of gold, 80% of demand, are buying gold jewelry. They probably don't even care about the spot price of gold, because they are paying way over melt at retail. The other 20% may care about intrinsic value, but they have to get real excited to affect the other 80%. Gold could probably swing up or down $100 and have little affect on the major gold consumer - retail jewelry. As gold pricse have gone down over the last three years, gold jewelry demand has dropped, the opposite of what one would expect. If folks aren't buying jewelry in good economic times, when will they ?? > This factor alone accounts for the fact that most of the supply deficit is met by CBs at a low POG - it's that simple. Too simple, because most of the supply defecit is filled by scrap (annual average of 507mt over the last ten years) not central banks (average annual of 260mt) There is only one year (1992) when central banks dumped more than scrap. As for primary mine production, it went from 2127 in 1990 to 2569 in 1999. That "extra" 442mt, as it continues into the future, still beats annual central banks selling. Central banks only have about 1 billion ounces available for sale, and most will not get sold. Miners have about 700 million ounces proven and probable, and another 900 milllion ounces of measured and indicated, which I am sure they will sell all of as fast as they can mine it (even sell it forward before they mine it !)