Gold

[Skol]

Gold is a self-correcting commodity like oil, if it goes up alternatives will be found and there'll be more mining.

It's naive in the extreme to believe that because the miners want $750 they'll get it, capitalism doesn't work like that.

I've put it here before, prior to the gold crash of 1980, suckers believed there would be hyperinflation that never eventuated and they got their fingers burnt.

I've even seen some say we're running out of gold and silver. LOL, wanna bet, there's heaps of it. There's always someone saying we're running out of food, oil, silver, timber etc.

"A ponzi scheme". Couldn't have put it better myself.

[skid]

Food for thought:What is different about now and 1980?[when gold crashed]...And what would it actually take to cause Hyperinflation..Is it possible ,or just a myth?

[elZorro]

Here's perhaps a basic version of the gold argument, with some good balanced points. WSJ, today.

http://online.wsj.com/article/SB1000...googlenews_wsj

So maybe you are right, Skol (not with everything I hasten to add ) in that the demand for new gold has dropped back with the higher prices. But the article implies that gold will stay high for a while yet (2010), and many others note a "flight to home" which usually includes a "flight to gold".

That's good enough for me, as I'm backing a local business and success story that happens to be supplying gold into that market. Best of both worlds I reckon. If the POG dropped below their normal breakeven later, they'd extract only the highest grades and drop back on volume, or even mothball parts for awhile.

Gold is climbing past $1215 again right now..hard to argue with that.

[ENP]

Just went to Westfield mall the other day. There is a stall in the mall buying "all gold for quick cash" and just heard an advertisement on the radio about stalls buying your gold.

I've never ever heard or seen these before.

[upside_umop]

SKol mentioned it a few pages back.

They're paying around about $700 an ounce...NZD (around 2 weeks back). I queried, thats it about 60% less than spot, but I dont think he understood.

[shasta]

Just went to Westfield mall the other day. There is a stall in the mall buying "all gold for quick cash" and just heard an advertisement on the radio about stalls buying your gold.

I've never ever heard or seen these before.

Walked past a gold stall again today in the Porirua mall, i was wondering what they would but it for, $NZ700/oz, thats over $NZ1000 less than spot, OUCH

[JBmurc]

FACT- production from gold mines only managed
to supply 75% of the 120 million ounces of
identifiable global gold demand last year.

guess where the rest comes from-------------- Scrap like the gold stalls that pay you 700 then sell for easy twice that amount to the mints that then on sell for a profit

[upside_umop]

What is most of the demand for?

Do you have a breakdown ie industry, hoarding, jewelry etc?

[JBmurc]

What is most of the demand for?

Do you have a breakdown ie industry, hoarding, jewelry etc?

Not exact numbers but I do believe -store of wealth hoarding etc is the biggest demand of late very little industry demand(unlike silver)
I did just read that back in 1950 average grades of major gold producers were 6g/t today it's closer to 3g/t so major miners are having to turn over twice the amounts of ore tonnage to reap the same supply the world demands ---China is currently going nuts on increasing their Gold production an is now not only the world's biggest buyer of late but now heading for the world largest producer Not for export but for their growing domestic consumption as they are openly telling the public to buy up gold silver for a store of wealth---remember this is the country with a massive war chest of Euro's an USD's

--Now who would you believe the debt laden US/UK financial masters that would tell you that Gold's a relic(like Gordan brown said just before he sold U.K gold for a record low) or the guys that have the masses of world currency wealth an is not keen on selling any of their Gold production or rare earths??

[elZorro]

FACT- production from gold mines only managed
to supply 75% of the 120 million ounces of
identifiable global gold demand last year.

guess where the rest comes from-------------- Scrap like the gold stalls that pay you 700 then sell for easy twice that amount to the mints that then on sell for a profit

I wonder if the total gold demand is dropping though, as Skol asserts? It's increasingly common that we have to look towards China for some of the answer..there's a huge population there, steadily earning more income.

Supply and demand statisticsGold Supply and Demand – Q1 2010
Demand for gold is expected to be strong during 2010, driven by growing demand for jewellery in China and India as well as an increase in European and US investment in the context of continued economic instability, sovereign risk and the threat of a ‘double dip’ recession.

Demand in India and China will continue to grow, driven by jewellery demand, in spite of high local currency gold prices. In Q1 2010, India was the strongest performing market as total consumer demand surged 698% to 193.5 tonnes. In China, demand proved resilient; demand increased 11% in Q1 2010 to 105.2 tonnes.

This strong demand is despite high local gold prices, which on May 12 in India increased to Rs 56,032/0z, the highest level for the year, while at the same time in China prices reached an all-time high of RMB8,480/oz, suggesting that consumers in India and China are becoming accustomed to higher gold prices.

Concerns over Greece’s public finances and debt contagion fears in Europe have led to strong buying in particular for gold coins, bars and gold exchange traded funds (ETFs) during May which may show up in the Q2 2010 figures. While momentum in ETF tonnage paused during Q1 2010, gold ETF flows started to rise strongly again in April and May as investors sought less volatile investments in which to protect their funds against economic turmoil. On 20 May, SPDR Gold Shares (GLD) held a record 1,200 tonnes, with a value of US$46.88 billion.

Read more about Gold Demand Trends in our detailed report, which also includes commentary on supply.

Press release: Strong gold demand expected for 2010

Data on the supply and demand for gold are compiled by GFMS Ltd. The company provides a number of tables exclusively for the World Gold Council. The following table shows a summary of gold demand. Links to more detailed tables, and to notes and copyright information, are given below. Please note the restrictions on disseminating these data.

http://www.research.gold.org/assets/...T_Q1_10_pr.pdf