Gold Price Explained

It finally got through my thick skull.
I have a new understanding of why gold has gone up so much in the past seven years.
Why the price of gold is out of line with other commodities....

Largely because of GLD

GLD is an ETF , exchange traded fund, which holds gold bullion
in fact it is holding almost 70 billion dollars worth of gold right now
$70,000,000,000 DOLLARS!

in effect they have cornered the market on gold.
All this has removed a tremendous amount of gold from the market and just put it in storage.
People will say it is new demand from India and China
That is the propaganda line. That and the possible future inflation and dollar devaluation
but those things are not an adequate explanation
the new thing in the world is the GLD fund
This fund was opened at the end of 2004 and then
the price of gold started escalating out of line with other commodities like oil and platinum

Now for the rest of the story.
Ultimately even with the GLD distorting things
the market will reassert itself

this means that ultimately the price will drop back to near the price of production
which is still only around $500 an ounce.

when will this happen?
I expect some time in the next five years
If I had to make a date I would say Jan 1, 2015 the price of gold will be around $555 per ounce
see you then