I completely agree with you Sum. They want to talk about the scrap gold increasing and the jewelry demand decreasing and that the laws of supply and demand will push us down. They fail to mention that all the big gold producers have almost completely dehedged their position, central banks have gone from net sellers to net buyers, that we are mining lower and lower grades all the time.

However to me, the most important part is that higher gold prices may dent jewelry demand but has zero effect on the investment side. In fact, the higher and higher prices are probably waking people up and wether you bought gold at $300, $500 $1000 or $1250, if gold keeps going up, you do not care about what price per ounce you paid. You care about protecting your buying power and getting a decent chance at an ROI.

The demand side of the equation from the investment side can easily overwhelm the shortfall in jewelry and increase in scrap. When buying CMM, producing gold at $500 per ounce or better, I am very comfortable.

Glorieux