top two gold and silver specs, page-36

re: gold 426!!!! starting to move again hehehehheh As we can see there is absolutely no correlation between the gold price and IGR. When it comes closer to being a producer, things will change. So the following report is interesting.

The price of gold is set to rocket, says Andisa gold analyst Dr David Davis.

His report, 'A trilogy of gold - an exploration in three parts', indicates that gold will reach $1 200 an ounce by the end of 2015.

His prediction is that in 2008 it will go to $700 an ounce, a year later it will climb to $750 an ounce and another $50 an ounce to reach $800 an ounce in 2010.

These predictions answer the question blazing through the industry currently: what will gold sell at and what will shares be worth in 10 to 15 years' time.

In arriving at the answer, Davis looks at the current gold price, historical trends in mining operations and historical supply and demand patterns in the 55-page report.

He argues that supply is falling behind demand and fewer reserves are being mined as resources diminish.

Not a new phenomenon, but previously this trend has been masked by Central bank sales and producer hedging - a dying practice.

When this ceases, says Davis, economies of the age-old supply/demand equation will take over and flame the price of the metal.

This, he argues, will mean investors having to be in the right place at the right time to make money.

Traditionally, gold has been a haven when currencies turned risky, having soared since 1971 when the gold standard was abolished.

Currently, the dollar weakness and euro strength underpin the gold price.

Volatility in the price ensues when there is political or supply uncertainty - causing speculation in the market.

“The correlation between the dollar:euro exchange rate and the gold price is statistically significant.

“The correlation means that a one-cent change in the dollar:euro exchange rate drives the gold price by $3,6/oz,” says the report.

Davis predicts that, given the US's deficit, could see the dollar:euro go to 1,4 by year-end.

Dollar weakness will continue through 2005, possibly compounded by the Chinese yuan's move away from a dollar peg.

Add to this inflation, and the dollar will remain weak yet will continue to underpin the gold price.

Dollar weakness is set to continue for the next ten years and supply/demand factors will, as Davis says, “trigger a quantum upward change in the gold price - enough to sustain a higher gold price, but now at a new gold price $ equilibrium”.

Davis moves on to analyse gold production since 1900 which, he says indicates three regular 30-year cycles and a fourth incomplete, cycle.

This current cycle is entering a downswing, and a production upswing will only occur when global production has dropped to about 1 500 t.

“The timing of this low point in the cycle is likely to be between 2010 and 2015.”

The peak of the last cycle has already been passed, in 2001, at 2 621 t.

Davis says that mine production over the next ten years is likely to decline significantly.

This is, in part, due to dwindling reserves, and new mines coming on stream will not offset the shortfall.

Global production, says Davis, will drop after 2006 to between 2 100 t and 1 790 t by 2010.