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#3
02-02-2009, 05:43 PM
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 Re: Inflation of Gold (my Bad) JoeTaxpayer wrote: - quote - > I blew it. > http://www.research.gold.org/supply_demand/ > shows industrial & dental totaling 9% or so of total demand. Not huge, > but not a factor to dismiss, either. JT, speaking of "my bad" - if you'd pasted in my complete post from 2007 it would have retained the source and date for those figures you quoted above. Here's the rest of it: - quote - > When someone raises the question of investing in gold (client or
for gold -- major categories of supply and demand...GO!...." I have yetcolleague) my response is: "without hitting google, describe the market to hear an answer that is anything close to correct. I don't have these updated but they don't vary all that much - this is from 2005, in tons of gold, as quoted in Barron's 1/06: - quote - > DEMAND > 71% 2950 Jewelry (mostly US, China, India) > 7% 300 Central banks & industry > 6% 250 Hoarding > 7% 300 ETFs > 3% 130 Coins > 5% 200 Hedging reductions > 4130 Total Demand > SUPPLY > 2500 Production > 850 Scrap > 500 Official sales > 3850 > (-280) Surplus (deficit) > So if you're considering gold as a valid "asset class" within a > portfolio, consider the market for it. Many of the rationales for > investing in gold break down when you look at it this way. Industrial > uses are a very small component of demand. It's all about jewelry and > similar "non-essential" demand components (contrast this to say oil > or copper which are essential commodities). Marginal demand from > speculators appears to drive short-term pricing to a large extent -- > check out the price spike around the creation of the gold ETFs for > example. Marginal supply from central banks and exiting speculators > can easily supplement existing production to drive down price. > Meaning its "intrinsic value" is, in my view, a complete wildcard. -Tad |
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#2
02-02-2009, 02:18 AM
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| Re: Inflation of Gold (my Bad) Xho Jingleheimerschmidt wrote: - quote - > I think that "Central banks & industry" would include industrial (and
I blew it.> maybe medical) uses like he listed. But what a bizarre lumping together! http://www.research.gold.org/supply_demand/ shows industrial & dental totaling 9% or so of total demand. Not huge, but not a factor to dismiss, either. Joe |
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#1
02-02-2009, 12:59 AM
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| Re: Inflation of Gold JoeTaxpayer wrote: - quote - > Steven L. wrote:
I think that "Central banks & industry" would include industrial (and> > It's also impacted by the fact that gold does have industrial uses, ... > This is the demand from a few years back > ... > 7% Central banks & industry > This adds up to 99% or so. So less than 1% of the demand each year goes > to "other". Hardly enough to impact the supply/demand. No offense. maybe medical) uses like he listed. But what a bizarre lumping together! Xho |
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02-01-2009, 08:13 PM
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| Re: Inflation of Gold Steven L. wrote: - quote - > It's also impacted by the fact that gold does have industrial uses,
This is the demand from a few years back> which takes some out of circulation. Gold-plating for electrical cable > connectors; gold fillings and gold crowns in teeth; etc. When a person > with gold in his teeth dies, he and his gold may be buried indefinitely. 71% Jewelry (mostly US, China, India) 7% Central banks & industry 6% Hoarding 7% ETFs 3% Coins 5% Hedging reductions This adds up to 99% or so. So less than 1% of the demand each year goes to "other". Hardly enough to impact the supply/demand. No offense. |
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#-1
02-01-2009, 05:23 PM
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| Re: Inflation of Gold JoeTaxpayer wrote: - quote - > norak wrote:
It's also impacted by the fact that gold does have industrial uses,> > I know an investment banker who converted all his net worth into gold > > at the beginning of 2007 just before everything tanked. > > > Gold is a popular investment today. It is even possible to invest in > > gold via your retirement fund. > > > Many claim that gold is a protection against inflation. If you hold > > paper currency there is the risk that the central bank can print more > > paper currency, which decreases the value of each unit of the paper > > currency. > > > However, couldn't the same thing happen with gold? Gold is mined > > around the world by gold miners. Over the last two centuries there has > > been a steady increase in the amount of gold produced. > Well, at $600 or so, he missed more than half of the recent run up. See > http://www.gold-eagle.com/charts/33yeargold.gif > When viewed in hindsight, his risk of losing all his gains and then some > is there. Ask him to tell you when he sells. You know anyone who sold at > $850 back in 1980? I sure don't. > When you view the long term (I mean the 100+ year charts), gold provides > some protection against hyperinflation, but little else. It provides no > return beyond just keeping up with inflation, and long term lags even > 1yr t-bills (The so-called 'risk-free rate') > That said, long term, gold is not likely to crash based on new supply. > With annual production at 50 million oz/yr and the total gold mined > since creation estimated at 5 billion oz (yes I picked one number here, > the range goes from 5-10, but the point is no different) you can see > that the impact on supply is less than 1%/yr. In fact, the 'supply' is > impacted more by the fact that at some price people decide to sell their > jewelry or other gold collectibles. which takes some out of circulation. Gold-plating for electrical cable connectors; gold fillings and gold crowns in teeth; etc. When a person with gold in his teeth dies, he and his gold may be buried indefinitely. -- Steven L. Email: sdlitvin[at]earthlinkNOSPAM.net Remove the NOSPAM before replying to me. ======================================= MODERATOR'S COMMENT: Please trim the post to which you respond. "Trim" means that except for a line or two of the previous post to add context, the previous post is deleted. Thank you. |
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