Here is a very important reason. When gold was last trading around that level we have to go back to 1987. Gold was also around AUD$650 then. Now that's in 1987 dollars with 1987 cost levels. Fast forward to December 2004 and you can see that there is nothing special about the gold price at present, both in $US or $AUD where it's only $480. Also 1987 was only seven years after gold hit its peak of hundreds more. In 1987 there was a real expectation that gold would hit US$1000. Now there is an expectation among many that gold will hit US$500 at best and then correct again into the doldrums.
