Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Zardoz who wrote (86370)	6/4/2002 9:38:39 AM
From: E. Charters	Read Replies (2) \| Respond to of 116764

So if the market is efficient, gold is not over priced, it is the right price for today. Perhaps not for tomorrow., So what is making it that price, as it must be supply and demand? If supply and demand is as efficient as you claim, then gold is not overvalued. If the market is not efficient as you seem to claim, by your fundamentals approach, one which is impossibly complex usually, then gold could be overvalued, or undervalued. If the supply is fixed by the slow nature of production changes, then it is more likely it is undervalued. Does the sale by Central Banks change the amount of gold in the world? No. So how does it effect supply? It does not. It effects the market today. But not tomorrow. If gold is not an elastic commodity then it does not respond to supply and demand as you claim, except weakly over long periods. After all, how long does it take to start a gold mine, or increase production worldwide significanlty? We should not then expect sharp curves, except in the classical commodity sense of perception of scarcity, and sudden rise. We cannot oversimplify here because gold may not react all the time to the same variables in the same way. In some periods it has climbed markedly with inflation. At other times it has remained undervalued. It may react to supply and demand of the dollar. Could this be more important? EC<:-}