Gold price, page-4288

That is a bit of a misguided post I think. Gold isn't a commodity in the traditional sense of the word. I would prefer to look at your logic from the converse perspective. People don't buy a barrel of oil to keep in their garage as an investment. It is a commodity used for a purpose and nothing else. As long as supply is greater than demand then it will fall in price. Supply is not entirely elastic, it takes time to ramp up or down on production so it is definitely not as simple as a glut will disappear in a month. Secondary to that demand is dependent on prevailing economic conditions to some degree and there is no obvious point in time you can identify that demand will reverse course.

Gold is not in a 'glut' because it doesn't have a single purpose. If all gold did was make jewelry, wiring etc, then sure maybe we would see a gold glut but that isn't the case. Gold is really a quasi commodity/currency. People buy it as a safe haven, people buy it as currency, people probably are buying it in today's messed up world for the simple fact zero yield is better than negative. The rules of gold are out the window. For this reason demand can always exceed supply even though physical uses for gold do not. The dynamics are completely different to those seen in the oil market.

As for your last point. 100% margins on the oiler = $30 per unit. 30% margins on BDR (nevermind the fact BDR will make 100% margins in H2) is $300 unit. Therefore the oiler would need to be generating 10x more units just to meet the same revenue above COGS. So unless they are producing 1.6m BOE then their MC should be less. Particularly based on the fact they are dealing in a declining commodity vs gold which is forecast to rise.