Updated: 1 May, 2005

Is Gold Linked To Any Currency Now? First, I would like to state that I firmly agree with the Founder and Chariman of Barrick Gold Corp, Peter Munk, when he said recently that gold's tight supply will play a major role in determining its price in the near future. Second, I have always said that a trifecta of influences will determine gold's value; (1) Supply and Demand; (2) Currency fluctuations, particularly the USD; and (3) World Events or the Doomsday Effect. In the last few years the currency or USD values have been the major player, with supply and demand in second place, but early this year, gold has uncoupled itself from the USD, the Euro the Rand, etc., and is fluctuating based upon Supply and Demand. Since demand is about 7% higher than supply and South Africa is decreasing production due to many factors, and most major gold producers have no plans to bring major mines into production, I see demand remaining strong throughout the remainder of this year, and supply to remain behind demand, driving the price of gold for the remainder of the year. So, for the remainder of this year, I see the gold derby to have supply and demand in first place, with currency fluctuations in second place, and world events following in third place. Which means that gold should hit $475 to $500 per troy ounce this year, and remain above $435 for a while. Now if I could only pick the Kentucky Derby Win, Place and Show horses so easily.

But that's just my opinion. Charles Kubach Mine-Engineer.Com Return To Gold Page