Show jH THE COLD since the beginning of when gold ownership became legal In the United gold prices have fluctuated bet- and ounce- and with inflation threatening money and money-related cur- rent demand for the yellow metal is Trading at this time near an gold has become a popular hedge against Common Price Determinant The unique forces of supply and de- mand that govern the price of gold are frequently influenced by variables that bear little if any relationship to cor- responding levels of production and spec mand will exert upward pressure on god prices but reasons underlie such a shift in demand often purely A look at the reCent past may shed some light on this unusual feature of the gold From up to the present the balance between overall gold min- output and worldwide industrial consumption has changed very olner the price has risen more than Developments that explain this ap- Jj But surely included are the depressed sUte of the dollar in relation to other the weak performance of stock and mounting speculation that the Carter tion's policies will rekindle well beyond the current The market's ability to absorb easily the sizable quantities of gold sold by international Monetary and the and India since June js an additional clear indication of the significant role psychological factors ln ultimate tion of Factor Worth Watching Jewelry and a variety of decorative account for some 55 of domestic gold while den- and industrial usages account for about 15 and 27 But speculative trading for the remaining 3 or 4 is largely responsible for wide swing in the price conflicting desires of various consumers further complicate this unusual market Those purchasing gold for an for look for higher Those buying the iu qualities as a raw are looking for stable or lower price not only stimulate the use of alternative materials but at the same time improve the prospects for otherwise unprofitable gold mining operations as well as methods ot recovering its For these a sudden decline in investor demand which is not sup- ported at high price levels by industrial demand and often result in a drastic price Developments that could bring about such a sizable con- traction in demand include a major up- turn in stock Prices a markedly and the possible resumption of gold sales by the U.S. political unrest in South the world's largest sup- lier could Cl that would boost Because the stocks of gold mining companies typically respond to changes in gold prices and because the metal has a history of being extremely the Research Department of Babson's Reports views these speculative issues as suitable for only the most aggressive even though the price of gold may ap- or even exceed an ounce in related mining Campbell Hed Uke Dome Mines ana Homestake already current |