Thanks Elroy, fascinating reading."Even though prices have...

Thanks Elroy, fascinating reading.

"Even though prices have fallen 5.8 percent to $US1177.10 from a record $US1249.40 an ounce May 14, the median prediction in a Bloomberg survey of 23 traders, analysts and investors is that it will reach $US1500 by the end of the year."

If that happens, we may be looking at $A1,750-$A2,000 an ounce by year's end. Even reserves at 1gm/t could be highly profitable. Imagine the South Africans digging down 3.8km into the bowels of the earth. I went down one of these mines and it was quite warm down there, almost hellish!

" 'People are afraid of the debasement of all the currencies,' said Peter Schiff, president and chief global strategist for Darien, Connecticut-based Euro Pacific Capital. 'What's surprising is that gold is still as low as it is,' he said, predicting $US5000 to $US10,000 an ounce in the next five to 10 years."

It seems unbelievable right now but then $US1,200 an ounce would have seemed unbelievable a few short years ago.

Now here's the interesting part:-
"Investment, including bars and coins, almost doubled to 1901 tonnes last year, exceeding jewellery demand for the first time in three decades, according to GFMS. Jewellery will jump 19 per cent to 2100 tonnes this year and industrial use 8 per cent to 398 tonnes, Sydney-based Macquarie Group says."

Many of us have been looking at the Indian demand for gold and predicting gold prices would drop if Indian demand fell off but this is out of date now. For a start the Chinese are now bigger buyers and secondly investment demand by the likes of George Soros and central banks as well as canny Germans is fuelling a demand greater than production. I have no doubt the Indians will resume buying gold not in the same volumes perhaps but to the same value.

Well, I now have my seat belt firmly tightened and am ready for take-off.
I have all I need for the journey and I'm not parachuting out before we reach our destination. I'll descend the steps in an orderly fashion at the right time.