Skol, while we've been arguing over the price of gold, this sort of thing has been happening - posted by Macduffy.
Note OGC's gains dwarfed by many..
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Skol, while we've been arguing over the price of gold, this sort of thing has been happening - posted by Macduffy.
Note OGC's gains dwarfed by many..
Anybody's guess what will happen next week, depends on the economics data. Most are not expecting a big push past 1260, so don't expect too much from gold equities.
U.S. Economic Data To Drive Gold Price Direction Next Week
10 September 2010, 1:40 p.m.
By Debbie Carlson Of Kitco News
http://www.kitco.com/
Chicago -- (Kitco News) A series of U.S. economic reports will help drive gold’s direction next week and could be a factor to whether the yellow metal tries to take out the nominal all-time highs or pulls back to test recent support.
Manufacturing data in the form of the Empire State Index and the Philadelphia Federal Reserve’s index and the producer and consumer price index reports, which measure inflation, will be released next week. After some recent better-than-expected economic news, like Thursday’s jobless claims, market watchers will be keen to see if this trend continues.
If the economic data turns out to be better than expected, gold prices might be capped for the time being, said Robin Bhar, senior metals analyst with Credit Agricole CIB.
Spot and Comex futures gold prices got above $1,260 an ounce this week because of renewed concerns about European debt, a Wall Street Journal story that said European bank stress tests were understated and a German banking association comment that suggested banks there needed more capital. Prices were unable to test the all time nominal highs around $1,266 and pulled back when U.S. economic news was better than expected. Further, volume in the markets slowed Thursday and Friday because of the start of the Jewish New Year, causing many market participants to take time off.
Whether prices retest the highs or pull back in part depends on the economic data, but also on the action of the U.S. dollar, Bhar said. The dollar has still played a bit of a safe-haven role when the markets quiver, but has sold off when economic news has turned positive as traders return to riskier assets.
Spencer Patton, founder of Steel Vine Investments, said he sees gold in a “topping process” in the intermediate term, especially since it was unable to take out the all-time highs. He believes the flight-to-safety rally gold enjoyed earlier this week was a bit overdone and prices could come back. “We’ve reached a peak for now. I could see gold in a sideways trend, but it shouldn’t fall beneath $1,200,” he said.
Gold received a bit of a bounce Friday after the International Monetary Fund said it sold 10 metric tons of gold to Bangladesh, which traders took as a positive sign that Asian central banks are willing to add to gold reserves.
Even so, Bhar said, he believes that for gold to test the nominal all-time highs, it will take a push by speculators to do so. Given that the yellow metal was only about $10 from that high, there might be interest in taking it out if momentum goes that way. However, he’s cautious about how gold might act after that event. “Every time we’ve made a new high, gold tends to lose $20 or $30. There are a lot of longs in the market who are ready to take profits,” he said.
Patton said while in the near term he thinks gold has plateaued, the market will likely rebound toward the end of the year as the factors that are keeping gold underpinned remain, such as European debt concerns and accommodative monetary policy. “Goldman Sachs is talking $1,300 by year’s end and that’s possible,” he said.
One market that might benefit from any gold strength is silver, which has rallied lately in an “also-ran” fashion. “If you like gold, you might buy silver. It’s cheaper compared to other metals and even if it pulls back you, won’t lose much,” he said.
Although he sees silver rising as a by-product of gold strength, that doesn’t mean he’s very bullish on the metal. He said the fact the fundamentals don’t support a rally – silver remains in surplus with producers ready to sell at higher prices – means he doesn’t see the gray metal going much past $20 an ounce. He added, though, if copper can rally on positive economic news, silver could get an extra bump up for the industrial component.
By Debbie Carlson of Kitco News;dcarlson@kitco.com
Gold forming a new base ready to set off again maybe on the mass negative of over leveraged US debts to be re-set again soon..time will tell
NAV booming ahead 23c
Good to see Oil kicking higher again just been loading up with AMU did you dislike them SKOL ? think they will fall like NAV not far from 100% profit from March
Minesite Weekly Roundup 6th – 13th September 2010
It only takes one deal involving a well known acquisitor and the whole basis on which junior mining companies are valued can be transformed. Rob Davies, who writes a weekly column on Commodities for Minesite, seized on the price being offered by Goldcorp for Andean Resources as evidence that the game had changed.
Goldcorp looks like acquiring Andean Resources for US$3.5 billion, and, given that the resource base at Andean's Cerro Negro project amounts to a mere three million ounces of gold that works out at US$1,167/ ounce. That looks like a staggering price to pay when compared with 2009 when the average price paid for reserves was around US$150/oz and for global resources including reserves less than US$50/oz. But 2009 was a very tricky year as mergers and acquisitions came back to life slowly after the global financial surface. The trend has certainly been accelerating since the last quarter of that year, but even so US$1,167 looks very generous at a time when the price of gold is around US$1,250/oz.
OK, there are some 25 million ounces of silver in the resource mix, but it is gold that Goldcorp is after. Wayne Hubert, managing director of Andean, adopts the ultra cool approach saying that he expects resources to double so the price being paid is only US$583/oz, but even that is right at the top of the range of prices paid by 290 buyers of companies who have completed gold mergers and acquisitions so far this year.
As Rob went on to point out, if you add on US$100 per ounce to build the mine, and another US$60 for cash costs (net of a significant silver credit), you've still got change out of US$800 to for the production of each ounce of gold. The question investors will be debating is whether that is enough. Goldcorp is taking two big bets here. The first is clearly on the price of gold and here a fair amount of encouragement will be received from the way the market took the IMF's sale of 10 tonnes of gold to Bangladesh in its stride. The second is on the consistency of mineralization as geology can be a fickle friend, flattering only to deceive.
It is not going to be cheap to double those resources and Cerro Negro will not be a big producer when it does start in 2012 at 200,000 ozs. That is the key issue driving mining merger and acquisition and commodity prices. There simply isn't much new metal being found and that must be the key to the deal. What with politics, environmental considerations, lack of infrastructure and many other considerations maybe the big boys are panicking as to how they can maintain their production and resources in the years ahead.
"With this project you can add ounces year after year after year, and therefore, add value for your shareholders," said Chuck Jeannes, chief executive of Goldcorp. Yes, that would be the hope, but John Ing, an analyst at Maison Placements added a dose of cold reality when expressing doubts over the production date, noting that a feasibility study, exploration and more drilling were needed before construction could begin.
In the end all will be revealed, but in the meantime one can envisage hectic activity in the offices of exploration companies all over the world as they rejig data in an effort to bring their resource profiles into line with those apparently required by the big boys. And while all this is going on their chief executives will be away on a course entitled "Elevated Optimism" so that they can play their role to the full.
By Charles Wyatt
No thanks and no gold or silver.
Warren Buffett, who thinks gold is a waste of time says he's a "huge bull on this country" referring to the USA.
That probably means the appetite for risk will return and the so called 'safety' of gold which has always perplexed me, will diminish.
There's no mention of this colossal debt that you keep on about in the US papers JB, it's business as usual, when is this calamity going to occur?
I was reading an article the other day that said gold was a great investment, too much debt, too much money printing and there's going to be hyperinflation.
The date on the article was 2001. LOL
Man,
Leave this forum for about 3-4 months and JB and Skol are harping on about the same old stuff. Nothing has changed. Who won the bottle of wine?
The word "bubble" is probably the most overused word in finance/economics.
At least by armchair analysts.