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

To: Enigma who wrote (84859)	4/28/2002 10:16:53 PM
From: E. Charters	Read Replies (1) \| Respond to of 116841

Within reason a business can sell as much gold as it wants to or has to. If it had to sell as much of some other manufactured product, then the cost of marketing, advertising, selling, and delivering etc, becomes a major drain on profits, often dictating the end price. This sort of problem, the distribution and marketing problem, occupies a major portion of the efforts and expense of running a business usually. Gold, on the other hand, does not have to be marketed, distributed or advertised. All that has to happen is that one offers it for sale and it will find ready buyers, albeit at a fixed price. This price can be known for months ahead of time and production costs and levels calculated and profits predicted solely on manufacturing costs to a very accurate degree. In this way the gold mining business is unique. Thus, solely by engineering calculation and planning, its profits may be predicted and maximized. Only recently has the added complexity of betting on future prices by using derivative instruments become a feature of running a gold business and making money therefrom. If it weren't for governments plotting against gold price and fixing it in relation to currency, historically gold would form a very safe investment, in that while ostensibly it does not have an interest rate compensator built in, the rise in price over long periods has the inherent effect of compensation. While one may not make a great deal by investing in gold, one will never lose a great deal by doing so, and one's investment is very liquid. Investment in paper securities, bonds or currency on the other hand, while spectacularly successful at times, is often an equally spectacular and ruinous failure EC<:-}