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To: Secret_Agent_Man who wrote (365504)	4/15/2008 10:50:02 PM
From: ldo79	Respond to of 436258

why do that when it's running low................<g> Record low for gold supplies, says investment veteran By Sara Smith \| 15:30:54 \| 15 April 2008 Gold supplies are at an all-time low and may drop by as much as 15% over the next five years, according to BlackRock’s precious metals investment veteran Graham Birch. The Citywire AAA-rated manager, whose MLIIF World Gold Fund fund celebrates its 20th anniversary this month, said that a lack of new production is resulting in tension between jewellery and investor markets. Birch said that during the 1990s growing mine supplies caused the jewellery market to surge ahead as the prime driver for gold. However, he said the decline in production has seen jewellery demand displaced by investor demand. ‘Investor demand has really come back to life as people have realised that gold is a rare commodity,’ he said. Supply is low however, as gold exploration in the past 10 years has been minimal and although exploration spending has increased, it can take up to seven years for a mine to become fully functional. He also pointed out world gold mine production peaked in 2001 but is now falling. It was down by 1% in 2007 and 3% in 2006. Birch said: ‘During the 1990s, the price of gold was kept low by central banks selling off substantial parts of their reserves, adding to supply in the market. As gold prices fell, gold mining companies scaled back exploration and reduced spending on existing assets. Investment has not kept pace with the subsequent rise in the gold price, so new gold supply is hard to come by.’ Ongoing power shortage issues are adding to the problems seen in precious metal production added Birch. In particular, power issues in South Africa have had a huge impact on platinum production as blackouts occur frequently and shuts down output completely. The manager warned that the markets will be hearing more about commodities being affected by power issues in the near future. According to Lipper, the Merrill Lynch Gold and General fund has returned 45.4% over the 12 months to the end of March, compared to FTSE Gold Mines return of 29.1%.