From Hedge Fund Market
Wizards:
“Many years ago, when I was a commodity research director, I
would totally ignore gold production and consumption in analyzing the market. I
would base any price expectation entirely on such factors as inflation and the
value of the dollar because those are the factors that drive psychology. I
always found it ridiculous when other analysts would write lengthy reports on
gold analyzing such things as annual production prospects and jewelry usage.
Annual production and consumption of gold are always a tiny fraction of supply,
maybe around 1 percent, so who cares how much they change. It has nothing to [do]
with the price.”