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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (101691)	7/1/2013 6:16:54 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 217588

Sticking with gold, where to from here? The easy answer is that various mines are being shut or put on ice, so that suggests that the price of gold is now too low since existing stocks will eventually run out at the current price because production [I guess] will soon be less than consumption for jewelry, electrical contacts, and whatever else it's actually used for. But that ignores that gold is made from oil [not quite literally by transmutation but because oil is such a major component of the industrial processes that produce gold and other energy sources are fungible with oil [more or less]]. When a gold mine is shut, the trucks are parked, or sold, jaw crushers go quiet, chemical processes, pumping and conveyor belts cease, so oil consumption goes down and oil producers end up with a glut of oil to dispose of. So they cut the price to compete and maintain their customers. The cut-price oil makes some gold mines economic. So as gold prices fall and oil prices fall, there is a feedback loop that continues until the balance between oil and gold production is reinstated and prices match up. Since oil price hasn't really fallen much, it looks as though oil is due for a tumble, especially since there are megatons of methane now available, at low prices. Both oil and gold prices should be falling further. There doesn't seem to be much panic about the US$ or other big currencies such as euro, yen, yuan, so the flight to gold is on hold. When the world's pre-eminent gold price soothsayer doesn't really have much idea about what gold price is going to be over the next year, we can say it's anybody's guess. Big Ben has won against the Gold Bugs, for now anyway. But tomorrow is another day. Oil should go down in price substantially, and gold should do a bit more of a slide too as gold production costs slide. Sugar is $1.50 a kilogram retail and that's more or less like diesel, so prices of fuels can come down a lot. No double your money back guarantee. Mqurice