Which recession are we talking about, the last crash or 1987.If...

Which recession are we talking about,
the last crash or 1987.

If we are talking about the last one, everyone was diving for cash. We are not only talking about gold. Super funds and property funds were frozen to prevent a meltdown.

Some financial institutions had to sell almost everything to cover their obligations.

Lets look at copper and nickel, nickel being a leading indicator, copper being lagging indicator. These metals sale price went below 80% of producers marginal cost of production.

Now I do understand that demand can dry up fast, but it doesnt slide that fast in 4 months unless other factors are involved. Those factors, in my opinion were institutions exiting the market who needed cash.

Paul Keeting said it was a liquidity crisis, not a credit crisis. He is spot on. I dont know any company or bank that went under because it couldnt get credit.

Gold fell less as a percentage than zinc, nickel and most other metals. India purchased 4 ton of gold in one day, if gold was volitile they wouldnt touch it.
Thats $160 million worth of gold in one day.

If you are talking about inflation, then I assume you are talking about foreign exchance stability. If you wanted to protect your cash against wild foreign exchange movements, wouldnt gold be the better option.

Now gold is 1250 and ounce, such a sharp recovery.
I would have thought institutions are taking notice of that.
If anything after such a shockwave in the economy, a large spike in gold price would indicate market confidence in gold. I dont think you could suggest a recovery caused a second gold spike because there is talk of a another recession.

Lets assume you are right and the price did fall. The marginal cost of production for most gold mines is very high. I can't see how the gold price could stay low for very long.

Im quite happy to be wrong, but thats why I am with RMS a low cost gold producer.

The one who survives a recession is cashed up, low debt, lower percentile in production cost. I have applied that reasoning to all my investing. I must also mention management with a good reputation and track record.

If gold did crash, RMS would be in a fantastic position to take advantage of the market, which would probably more than offset any short term downturn.