To: LoneClone who wrote (11422 ) 11/13/2009 12:25:58 AM From: TrueScouse Read Replies (2) | Respond to LC:<<Analysing the gold market as if new mine supply dominated the supply side of the equation would be like analysing the dollar market as if the only dollars that really mattered were the new dollars that came into existence over the past year.>> ...<<...changes in investment demand (changes in the demand for the total aboveground stock) are more than 40-times more important to gold's price trend than changes in mine supply. To put it another way, a 0.25% (one quarter of one percent) change in investment demand is more important than a 10% change in mine supply.>> ...<<...changes in annual mine supply are tiny in relation to the overall market. The LBMA reports that an average of around 20M ounces (650 tonnes) of physical gold changes hands on the London gold market every day. This means that the equivalent of more than one year's mine supply changes hands in the space of only four average trading days on the London market.>> <<...If changes in mine supply are irrelevant, then what is relevant? ... almost regardless of anything else, gold's current bull market will continue until the current equity bear market reaches its conclusion, which, based on historical evidence, won't happen until after the average P/E ratio has dropped to single digits and the average dividend yield has moved above 5%.>>
