POG

Still slightly above USD$1700 per oz but the bad news is the rising AUD.  While a strong AUD is great for traveling or buying from Amazon, it is a disaster for exporters.  Profits will be affected as commodities are priced in USD.

http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=160789&sn=Detail&pid=102055

If you deposit $1000 into the bank, you would expect interest with $1000 buying power.  But what happens while your money is in the bank's hand while the government (.... like Zimbabwe or the USA) is printing more paper money, thereby eroding the value of that capital?  Luckily, no government can print it; they can buy the metal in the open market.

But gold is not the perfect standard for currency value.  If one of the major central banks dump its hoard of gold bars, then the POG can plunge.  But luckily it is only temporary.  Just ask Gordon Brown who got the Bank of England to sell off its gold cheaply... not that long ago.  The UK lost lots because gold price has never been that low again!

The known reserve of gold is diminishing and new discoveries are not replacing the fall due to demand.

Based on these factors, I cannot see POG plunging to below USD1500 per oz in the near future other than short term market manipulation.  But I am not Allah... nor an economist.