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To: Cold Heat
The price has been talked up by traders, just as they do with the price of oil.

This "talking up" stuff is nonsense on par with the Soviets blaming their annual famines on "record cold winters".

Commodities are up because demand is outstripping supply. Period. Over the last 150 years, intangibles and tangibles cycle in-and-out of bull markets in periods of 15-20 years. We're simply entering a phase of bull markets in tangible goods.

As for "speculators", there are always those in any market. They drive the tertiary and sometimes secondary trends within any primary trend. But they never drive the primary trend.

While we're on the subject of "speculators", I would contend that the current stock market is far more speculative than the commodities or the gold market. Your average stock market "investor" doesn't know squat about what they are buying.

182 posted on 12/07/2005 6:02:13 PM PST by Mulder (“The spirit of resistance is so valuable, that I wish it to be always kept alive" Thomas Jefferson)
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To: Mulder
In the case of Gold, it is because fearful people have been coaxed into hording it. This has been attempted with silver as well.

Frankly, I really could care less, but in the case of silver, it affects the prices of certain electronic and electrical hardware, and that affects the economy.

As far as gold is concerned, there are many uses for it, but substitutes are common for most of those uses. It then boils down to a bunch of collectors who try to manipulate the market and drive it up by circulating stories and writings that intensify the fear.

As they have been doing for decades.

One day, all this will fall apart when the market is suddenly flooded with gold that nobody knew was in circulation because it was hoarded.....waiting for the price to be right. This has happened before in the 70s, and I figure it's about due.

All it will take is one major sale, or something to start the stampede.

Then it all starts over again.....:-)

226 posted on 12/08/2005 9:00:24 AM PST by Cold Heat
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