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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Alan Whirlwind who wrote (13538)	2/25/2002 6:02:50 AM
From: sea_urchin	Read Replies (1) \| Respond to of 81356

Al, what many goldbugs tend to overlook, especially when the gold price rises, is that demand for gold products is VERY price sensitive and that a price rise will impact on demand. I have never seen a gold price v demand chart but, I am sure that even a 10% rise in POG will cut back demand by possibly more than 10%. As far as goldbugs are concerned, gold is ALWAYS too cheap, irrespective of who buys it and why. Therefore, when POG rises, by even a few dollars, it's always on it's way to $1000, or more. The price dynamics are of no concern to them. And, if POG fails to meet goldbug price expectations then there HAS to be a conspiracy afoot. In fact, it proves that there is. Frankly, I don't know much about the gold business and whether increased advertising will increase demand. In fact, I don't even know why people buy gold or who does although I do know that jewellery is the main use for it. I would think, in that circumstance, if jewellery were to be extensively advertised like Corn Flakes, it would be cheapened and not made more desirable. Already, many people feel, because jewellery is the main use for gold, that gold is no longer as "precious" as when its principal use was as a reserve currency. Of course, if you take the goldbug view, gold shouldn't be sold at all. In fact, there should be no mining. All reserves should be held in the ground and valued by them at whatever price they choose. Then, presumably on the basis of existing demand (for what and by whom I don't know), the gold price can rise to infinity!