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The Price of Gold
By what has been indicated up to here you will have noticed that in the last eighty years the price of gold has been somewhat fixed by the value of the foreign currencies that govern the international commerce. While the sterling pound honored gold pattern until 1918 and the American dollar guaranteed international trade of that country until 1973, its validity and value were unalterable with regards to the gold, for each one of them. When they stopped both foreign currencies were devaluated in front of the gold. Starting from 1973 to the present day, the price of gold has suffered several abrupt changes, or better yet the price of the American dollar as it’s floating against gold has suffered considerable variations in its value, always related to its balance of payments and fiscal deficits. But if you examine the value of gold as far as other foreign currencies goes, like the Swiss Franc or the German mark, you will find that the price of gold has been at somewhat of an equal price for long periods of times. We know the price that gold is at today and there is no problem with that. This information can be seen in the news, newspaper, a lot of mining companies provide that information, as well as the national banks that have direct contact with the New York stock market and they follow the variations that go on minute by minute. The problem is knowing what is going to happen in the years to come from now and for this it is necessary to look back once again. Several years ago the focus of the miner in general in auriferous projects was very simple. The price of gold was at a set price and that was that. This situation of fixed prices got to such an extreme that the laboratories made assays of the minerals in dollars and cents per ton or per cubic yard and the mining magazines of the time in the description of mining reserves indicated the assay in dollars. It has as value one dollar per gram of mine bullion and the difference that is equal to 12.5 percent, which surely was there as penalty of sampling, refining or selling expenses. As of today if any mining project of any metal caused losses or if it makes money will depend only on how well estimated the direction in which the price will move can be done. The method of throwing a coin up in the air to try your luck is not always such a bad idea, if you are also clear about the methods that are used by the professionals in the stock market in order to orient the investors. |
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