POG... its floor

I love dumpers! And having idiotic speculators around when you are not forced to sell (or buy), is actually a financial blessing.

Few people have time to read Our Man In Oz, one of my best tipsters. He is analytical in his weekly report on Australian resource equities. I have written a few times that the price of gold in the longer term cannot be easily manipulated because it becomes a function of supply and demand. It cannot be 'created' but has to explored, discovered, mined after a lengthy bureaucratic, environmental and financing process, extracted and refined, and then kept secure after purchase. In ancient AND modern world, it has little commercial application but it generated its own 'intrinsic' value. Luckily women love it! It does not decay but can be stolen.

As usual, when people sell down gold and the price falls, someone will want more of it. And late last week, it was the central banks! These are biggest hoarders of the metal. And if they are the trusted keeper of the wealth of a nation, then you cannot say that they were dumb to buy from dumpers. I hope Warren Buffett is reading this posting; he is a very smart man but his wisdom contradicts the collective direction of the central banks of the world. You cannot print gold.... not yet.

What is absolutely interesting but it didn't materialized is I wanted to buy physical gold last week when it fell below USD$1640 per oz. Maybe I should have been the purchasing officer of a central bank!