Long run precious metals
We have taken a short look in recent days at long run gold prices, including here and here, which showed that over the long term, gold has performed reasonably well, albeit without producing a yield. Returns have exceeded 5 percent per annum over the long haul.
And silver has returned more than 6 percent per annum, with some wild price spikes along the way.
London gold market in a real two-and-eight
But it's the short term markets which are causing excitement and consternation in spades for traders at the moment.
Gold live data flows saw prices way down at US$1139/oz earlier, shedding yet another 2,5 percent before looking somewhat relieved to have found some willing support.
I'm in the Old Dart myself this week (hence posting at apparently ungodly hours) and by the time the London 3pm gold fix rolls around we might expect to see prices back at around US$1145/oz so.
From a technical perspective, the gold chart has lost its Khyber, so it may pay to stay stewed pruned...
Silver is getting absolutely pebble dashed as well, down by nearly 5 percent at one stage, before a squeeze rebounding (at the time of web-logging it's now down by 3 percent at ~$15.50/oz - see above for how this compares to the market peak).
Moving on from these woeful forays into Mockney slang, we can see that even by market forecasting standards, gold price predictions have been fearfully unsound over the past few years with prices off ~40 percent since their peak.
Granted, in any market prices can remain irrational longer than market participants can cling to their sanity, but while further falls look plenty likely, prices should find a natural floor in time.
There are no hard and fast rules when it comes to fair market valuations, but all-in sustaining or production costs might be a reasonable enough place to start.