re: gold doing nothing again. is that so? he he
SP,
Sorry about that.
No, I defeated BW's 5 arguments, I would say. ________________________________
Subject + + the future of gold + + Posted 12/11/04 21:09 - 50 reads Posted by stolwyk Post #80612 - start of thread - splitview
THE FUTURE OF GOLD.
BW, you mentioned these points: 1. The oil scare looks to be over. The U will have enogh heating oil for the winter. 2. This means lower oil prices, which is not good for gold. 3. High gold prices have reduced jewellery demand for gold in places like India. 4. The US economy is still growing well. 300,000 new jobs were created. 5. All in all this is a bullish scenario for US stocks, the US dollar and bearish for gold. ____________________________________ RE 2. There is a loose correlation of gold and oil prices. Suffice to say that gold has to rise quite a large amount before any old ratio is restored. In any case, it takes more notice of a lower dollar or any other event.
Oil has a high profile and as soon as prices are too high, political pressure is applied. Not so with GOLD, it is not a direct necessity, the higher the price is, the more calls for a still better one.
3. The SUPPLY and DEMAND equation is discussed in (A): http://www.hotcopper.com.au/post_thread.asp?fid=2&tid=143338#80215
The jewelry demand has risen by 6.1% and 7.5% in the first 2 quarters. Please prove that this has gone down. All I know is that thanks to the WGC's efforts, it is increasing.
One mustn't forget that as gold prices rise, Investment demand can quickly rise too and could be at very high levels the more prices rise.
In the first 2 quarters, it rose by 27.5% and 40.7%. so it will rise much more in the last 2 quarters of 2004. (See "A"). You omitted that category.
We now have the ETF's (Exchange Traded Funds) increasing as well.
I mentioned in (A), the pending gold demand from China and India, the contracting supply in the next couple of years and that demand could outstrip supply in 2004, unless abnormal situations could lead to a still higher demand.
These may range from continued fighting in Iraq (Foreign fighters entering the country), damage to pipelines and installations, any other damage to countries or whatever.
The outlook for gold in the supply/demand equation is very good, IMHO.
5. The US has no objection to a lower dollar so as to be more competitive and to reduce the trade deficit. However, the US has been told by the UE that the latest fall is enough for the time being.
That has put a floor under it, but the US wil certainly not raise the dollar. It just needs to come down rather quickly IMHO so as to bring the trade deficit down. Just for now the US is cooperating with the EU CB (Central Bank). We need to wait for developments.
You didn't mention the US twin deficits and the massive debt. That alone wil be support for gold if it needed that.
As to markets, there have been many overseas comments that overall share prices are much too high and I can see the Dow/S&P coming down before long.
Gerry Readers, please do your own research and you decide if and when to buy, hold or sell any stocks. To visit archived posts, please use the Search button.
