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The key stock in the gold index is NCM. NCM is both a copper miner and a gold miner. It produces around 170 million pounds of copper and 1.2 million ounces of gold.
If the realised price of copper falls $1/lb it wipes out around $150/ounce off the realised gold price. Bit of a tug of war.
One of the limits on the gold price is the price sensitive nature of some of the demand - paticularly India. For gold to rise strongly some supply reduction equal to Indian consumption - around 600 tonnes/year - would be required.
If Central Banks decide to stop swapping gold for $US this could remove up to 500 tonnes/year and take the lid off this market.
Also gold could again become a part of portfolios in western countries in its traditional role as a hedge
