[Jewelry making - Article 01108] - Re: [Orchid] Price of Gold

[Michael R. Mathews Sr.]

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    Hello Haim and all: 

>     Since supply and demand do not have anything to do with
>     the current rise in gold price

    I really don't mean to offend anyone but  I must differ on this. Due
    to the low price of gold for some many years now, it hasn't really
    been very profitable to mine. Gold is constantly being discovered,
    but due to low gold prices and mining costs it has not been
    profitable to dig it up. People have still been buying gold, mostly
    on paper. More gold has been sold than has been mined and it will
    take many years to cover what is sold right now, not to mention what
    will be sold in the near future as the price rises. With a possible
    war comming and the way the economic situation is, more people want
    to take physical possession of their gold. This is causing a big
    shortfall in supply and when that happens, demand goes way up and so
    does the price. 

>     it will definitely go down after the war with Iraq. When and how
>     much is pure speculations. 

    If enough demand for physical possession of gold persists, then the
    mines that are just sitting there right now will start to produce
    and the price will not drop until demand drops and demand will not
    drop until supply is adequate. 

Michael R. Mathews Sr.     Victoria, Texas   USA

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