[charles brough]

The present rise in good prices has been going on for several years and the rate of rise is accelerating. People wish they had bought gold when the price was lower but fear it is just a price bubble and will soon collapse. They don't want to lose from such a collapse as gold has experienced many times in the past.

However, I notice something unusal with this current rise. There is no speculative activity in gold stocks. In fact, they have been drifting down for about a year! Moreover, when the price of Silver went through a speculative phase a few months ago, gold did not follow it but held to its same slowly accelerating rise. Silver prices shot up and topped out, then collapsed back to where they were before. The price of silver has still not equalled the high of that recent price bubble. And finally, it is hard to take a long drive without seeing many places with big signs advertising to buy gold. Generally, they are not much interested in selling gold. That hast to be because there is a shorage of gold now compared to demand.

All this means to me that the rising price of gold is not driven by speculation but by solid investing and it is not by just individuals who buy gold and then lock it away but even governments.