Gold bullion

The POG has been falling recently, more dramatic than usual.  That means on Monday, gold stocks will be hammered.  So will my portfolios.  However, if gold falls below USD$1600 per oz, it is time to ponder whether to buy an oz of gold instead.

Lots of central banks around the world do not hold enough gold reserve and lately have been buying the yellow metal according to RB of The Australian.  Indians and Chinese are still buying it and the demand outstrip the supply.  The balance is made up by gold which has been recycled.

At this stage, I do not have any idea why the POG has fallen.  But the supply-demand equation still holds over the longer term.  When the POG has dropped too low, some mines will stop operating.  However, desperate central banks have huge hoard of gold and can depress the price further if they sell.  Em... could one of the central banks be manipulating the price and hoping to buy back on the cheap?  Well, the last time the Australian central bank did that in 1997, it was made to feel like a fool...  Still is!  For it sold gold below USD$360 per oz; 167 tons of it at close to that price.