I agree with Bubb that sentiment is a worry. And if Russia is anything lik ethe other gold producers supply may also become an issue,:
Gold Union Says Output Rose 13.3% - Moscow Times - 02 February 2009
http://www.themoscowtimes.com/article/600/42/374126.htm
Russia boosted 2008 gold output 13.3 percent to 184.49 tons (5.93 million ounces), reversing five years of decline, after several of its biggest miners raised production, the main industry lobby said Friday.
The rise exceeded the Russian Gold Industrialists' Union's forecast of an 8 percent increase. Kinross Gold launched its large Kupol mine in Chukotka last year, while Peter Hambro Mining and Polymetal also raised output.
The union said 2008 gold output from mines rose 13.1 percent to 163.89 tons, compared with 144.85 tons in 2007.
Valery Braiko, the union's head, said production would be steady this year. "Our preliminary estimate is the same level, with the possible addition of 1 or 2 tons."
The country's gold reserves are second only to South Africa's, and Russia has plans to increase output significantly in the next decade by opening up new deposits in Siberia and the Far East. Russia traditionally ranks fifth or sixth in terms of output. Total gold production in 2007 was 162.84 tons.
The union said in a statement that 2008 output achieved by refining gold from scrap rose 22.9 percent to 8.14 tons, from 5.87 tons a year earlier. Gold as a by-product of other metals rose 2.8 percent to 12.46 tons, from 12.12 tons.
Braiko did not give a 2009 estimate for refining gold from scrap or as a by-product of other metals.
The Aussies are also looking to expand production : AUSTRALIAN GOLD MINER NEWCREST TO RAISE US$317 MLN
http://www.tradingmarkets.com/.site/news/S...ght-home-news-6
Let's face it, putting fiat into a gold sausage machine has rarely been a better bet. Better for miners than the metal itself. Indeed th edisconnect between miners and gold price isn't that odd when viewed in this manner.
Low falling/constant production => high gold price but subdued volume sales
Rising production => better sales volumes but lower gold prices.
People worry so much about inflation / deflation, but supply seem sto be a BIG issue to me. Take a look atthe attached chart. I'd be interested if people could broaden the data sets out, but for starters look how the bull gold market of the 70s can be explained by the fall / plateau in production. And in the 80s, a period of high inflation, where is the rising gold price? Stocks certainly roared away in the latter half. Why not gold? Maybe because of the boom in output of gold. And what of the noughties and the great bull run? Could it just feasibly be more a function of falling production than anything else?
If that's the case, with miners looking to ramp up production, gold could face serious fundamental headwinds...
... especially given that demand (from jewellery) seems to be falling off a cliff.
Abu Dhabi gold jewellery sales slide 70%
http://www.thenational.ae/article/20090201...483417/1005/rss
Would love to hear all your views as you follow gold very carefully. Apologies if this has been discussed before.
