that level. on the producer front, the process of consolidation amongst mining companies has continued, though not all of them, as recent events have shown, entirely in harmony. de - hedging has also continued. that process - in either direction - is of course a perfectly normal commercial activity, but i strongly advise you to find a better term than “ de - hedging ’, because friends of the countryside - never very well disposed to mining operations - might be inclined to take ‘ de - hedging ’ as an environmentally - unfriendly activity designed to flatten the landscape. it has, of course, had much that effect on leasing rates. i assume that is why much is written these days about the contango - which, again, the uninitiated might be forgiven for supposing was the gold market ’ s distinctive contribution to resolving the argentinian debt crisis. before leaving the past year, i want to recognize one other notable personal contribution to the standing of gold - kelly holmes ’ outstanding achievement in winning two of the most thrilling olympic gold medals any of us can ever wish to see. i mention this particularly because it gave rise to my own personal golden moment of the past year. as you may know, kelly holmes trains in south africa, and, by chance, my wife and i found ourselves alongside her at the security check at johannesburg airport a few weeks ago. she was carrying her gold medals, and so had to produce them for inspection. while we were admiring them, we were interrupted by the public announcement that our flight was ready for boarding and we were warned that it would take 15 minutes to get to the gate, whereupon i found myself, to my horror, saying “ well, if we stick with kelly, it should take us only 47 seconds ” - a remark so crass that my wife quite rightly refused to speak to me for most of the rest of the flight. with these and other challenges, or in my case bloopers, behind us, what now are the prospects looking forward? here, i think the prospects for the gold market can best be described in much the words that tended to be used in my own personal career performance assessments by my superiors over the years : in the medium term, the fundamentals look quite promising, but in the short run, performance has been erratic and the outlook is uncertain. if one looks at the fundamentals, i think a good reason for being positive about the medium term - and

a factor that is sometimes not given sufficient attention - is that gold has the benefit, uniquely so far as i am aware, of enjoying demand from four separate markets : it is a core ingredient in high - quality artistic artefacts, notably jewellery ; it has applications in industrial production ; it is a universal and long - standing outlet for private financial investment ; and it is a monetary asset. other commodities or artefacts share some of these sources of demand, but none covers the field so comprehensively. i do not, for example, think that my wife would be too thrilled if i have her a lump of coal, or even a can of petrol, for christmas. of these four markets, a striking feature - and again, a feature that i do not think gets enough attention - is that over the years demand for fabrication, notably jewellery, has consistently outrun current mining production. current production, on the supply side, and fabrication, on the demand side, are not of course the whole picture. the stockpile held by central banks can be, and has at times been, an important influence on price expectations ; but the central bank gold agreement has helped to provide stability in this area in recent years. equally, supply can fluctuate depending on scrap sales and producer hedging or de - hedging activity. but the underling balance of demand and supply, viewed over the longer run, strikes me as a good deal more healthy than in sometimes suggested. jewellery fabrication remains the major source of demand, and here prospects seem to me to be generally encouraging. as the global economy extends its recovery, and as emerging market economies make further progress in raising living standards for their large populations, higher continuing levels of consumer spending should bring increased demand for high - value artefacts, as indeed luxury good retailers around the world are already noticing. there should be increasing opportunities here for the gold industry to expand jewellery sales. but, to reap the full benefits, it will be important that efforts are put into design quality, product innovation and plain, straightforward marketing. lbma members might wish to reflect whether enough emphasis is placed on these key industry - support elements - particularly marketing. industrial use of gold is smaller scale, but nonetheless not insignificant, and may also benefit from continuing global economic growth. but the other main source of demand is for gold as a personal financial investment. here, as with jewellery, there should be excellent opportunities for broadening the market as rising personal wealth stimulates wider interest in gold - related investments