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beermee,
That's my entire point. In normal times, you're right. However, at present the price of gold (the real stuff, that you can buy and hold) is about 70% physical demand exceeding physical supply and 30% with an eye to the COMEX contract.
Paper COMEX gold (the games that hedge funds play), however, is still 99% paper player positioning and 1% supply and demand.
In the USA, up until the early 1930's, the gold price had been $20.67/oz for close to 100 years. However, during this period, overprinting of the currency came to a head. The physical (black) market for gold diverged significantly from the government mandated price level, trading up to twice the "official" figure. After about 4 years of this charade, in 1934 the government shifted the official price up to $35/oz.
In other words, the artificial price level eventually adjusted to the market price level.
This is one of the signs which the long term gold traders, like Jim Sinclair, have been telling us to look out for. The fact that people like SkipperX crow loudly that I'm a fool for pointing it out, doesn't worry me.
Gold has started to diverge from not only its own paper price, but the daily fluctuations of paper currencies. In the physical gold world, it is appreciating hard and fast in most countries around the world against all paper currencies.
If it can sustain this for a reasonable period of time, the artificial price will be adjusted upwards to meet the physical price.
