George, I'll repeat, a lot of verbiage, very few facts:
Here are some facts:
Demand: Total yearly demand for gold has declined from 4190 tonnes annually in 1997 to only 3414 tonnes in 2002 (I have not, et, seen statistics for the first quarter of 2003), a steady and continuous trend.
The writer is expecting the "masses" or what he calls "lemmings" to be converted to the yellow golden calf, but the lemmings are smarter than he gives them credit for, most of them did quite fine over the last 20 years investing elsewhere (including the last three years of a worldwide bear market). As a matter of fact, investment gold (which he thinks will be the panacea for gold prices, once the stupid lemmings finally understand their erring ways) demand in the years 1997 to 2002 has declined from a puny 459 tonnes in 1997 to an even punier 340 tonnes in 2002. The "lemmings" refuse to listen to the gold hyping "High Priests" (one point on which that writer is right.) On the other hand, gold production in the same period has increased from about 2200 tonnes per year to around 2600 tonnes per year.
These are simple fact that GATA and other gold letter writers never talk about in their verbose letters.
There are about 120,000 tonnes of gold above ground, about 33,000 tonnes in CB's coffers and about 87,000 tonnes in coins, bullions and jewelry in the hands of the public, a huge overhead supply relative to the puny demand. Did anyone here ever read in those verbose and tiring newsletters about the simple laws of "supply and demand"? Do they ever talk about the increased supply (due to improved extraction technology) and declining demand (as the last six years demonstrate)?
Except of some unforeseen financial calamity, there is really no driving force to get gold moving, apart of minor adjustment to currencies moves between themselves (gold has been in a bear market against the Euro in the last 18 months or so...), this particularly in view of the , by now, well known fact, that gold will never again serve to back currencies. I have elaborated on the impracticality (and actual potential damage to the world economy) if CB's returned to a gold standard before.
I wonder how much people are paying for the fully hedged opinion "Gold’s picture is sufficiently bullish (though not without a couple concerns) on its own as to not need an unrealistic and unreasonable "case" made for it anyhow.". What exactly does that "say"? The "Core issues" suggested some three years ago (yes at the top of the bull) did twice as good if not better (Particularly if stops were obeyed) during that period.
Zeev
