Dan,
I agree with you, on first order analysis it would appear that the supply of gold would be curtailed in the long run, thus placing upward pressure on the Price of Gold. That said, the producers are beholden to their shareholders to increase profits. It could mean that they will find ways to extract more from profitable units at the expense of the life of the mines. It would not be the first time we have seen companies be short sighted. However, I tend to favor the curtailed supply theory myself. Trouble is, I think in the short run, the news simply adds to negative sentiment. So who knows...maybe enough blood is running in the streets and we will rocket upward. I am on the sidelines at the moment, wanting some clear sign that we have bottomed. I really hate it when I can make credible arguments for either direction....means the market will do the opposite of whatever position I take <grin>.
Best,
Joss
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