i like gollllllllllllllllld.
- Thread starter krazykarl
- Start date
WallStGolfer31
Guest
Gold will be well below $600 by the end of the 2006. The fed's stopped raising rates and inflation looks to be low. Asian demand alone can't justify $600/ounce. -4%+ within one day isn't just profit taking...........
the price of gold is not tied to the fed - it's tied to two things right now:
1) fear in international relations.(Iran, iraq, etc.)
2) products. jewelry, electronics, etc. India is experiencing hyper-inflation, their population now has the financial means to afford gold products, and large amounts of it.
It may correct below 600, but it will never be below 500 again.
It's also tied to fears of a crash in the USD and /or US economy.
Problem is that established gold producers (who've been through the cycle many times before) are using much lower gold prices in their new mine development programs so a lot of their current exploration projects are not feasible. This has the effect of withholding potential new production even further and thus raising the price even higher. From confirming quality estimates from the boreholes it takes at least 3-5 years to bring a new gold mine into production.
Problem is that established gold producers (who've been through the cycle many times before) are using much lower gold prices in their new mine development programs so a lot of their current exploration projects are not feasible. This has the effect of withholding potential new production even further and thus raising the price even higher. From confirming quality estimates from the boreholes it takes at least 3-5 years to bring a new gold mine into production.
