can we safely say the bottom is in, page-129

An argument against investing in gold which is often brought up is that gold is that there is a constant supply due to it never being destroyed or consumed by conversion into another product through processing In other words all the gold mined in history is still around. This is prima facie, a fact and we could therefor conclude that gold has a very liquid market.

On the other hand however, one could also argue that a rapidly increasing amount of that gold is finding its way into the jewelry market in developing and increasingly wealthy economies of Asia and India. Unlike the traditional movement of gold from one bank vault to another, the conversion of bullion into jewelry at an increasing pace is actually taking vast amounts out of circulation. I know there is an argument that some jewelry is recycled and processed back into bars, however that would be a miniscule amount of total jewelry in the world. How many people do you know that have melted down their gold chains and rings etc?

When people buy bars of gold they do it for investment but when they buy it in the form of jewelry it is for adornment. As many more millions of people buy more jewelry to show their wealth, the more gold is being "consumed". This will inevitably mean that the hordes of gold in vaults will diminish in time as global supply through mining decreases