All, Suppose I thought the correction in precious metals was about done -- and now wanted to get long. I'm not interested in trading futures, but rather holding a portfolio of quality stocks, that are highly correlated to the price of gold. If I may, could I ask for your picks and more importantly why? Any feedback is most appreciated. Rgds G. PS - Gold is now @ 579
I have shorted NEM because I believe it has much downside risk even if gold maintains its current levels (which it won't) but have a large position in an Australian gold stock SAR:AX Check it out, it has much going for it. Australian Gold Stocks generally are not anywhere near as fully priced as ones trading on the NYSE. Try PSV:AX as well or BDG:AX for that matter. One that trades OTCBB is Argentex, a very interesting stock. I expect gold to fall to around US$400 by years end and probably in the high three hundreds. Well run miners will still make a lot of money at those levels.
hi alex ... do you then see the price of gold returning next yr to above $700 ? -I expect gold to fall to around US$400 by years end and probably in the high three hundreds.-
Anything is possible with gold but I think the hot money is gone and ain't coming back in a hurry. Even if the US$ depreciated in the next year or two,as a lot of people like Mark Faber is saying, I believe the run is over. In the long term >>5-10 years gold could and might spike again to even more silly levels.
Three guest 'economists' on CNBC a month ago said that gold will go to $850 an ounce by the end of the year and said it would go as high as $2,850 in a year or two"<<(Can you imagine how low the US$ would have to go for 1 OUNCE of gold to be worth this? It would close in parity with the Russian Rouble would it not?) I got the name of the company the guy represented and tried to phone him but he was "unavailable" for a fortnight ! Then a week ago I found out his 'investment fund' was almost entirely made up of gold mining stocks, call options on a range of gold stocks etc. It is important to do your research on the people talking gold up, they are VERY often long gold or gold stocks or call options on gold stocks.
I know gold is an inflation hedge but isn't it used in industry as well contributing to higher demand?
Nobody is sure to ANY degree of certainty what actual jewelry demand is! I remember Mark Faber on his website was making a point that gold jewelry now is more sought after now that the Chinese and Indians are now enjoying a "wealth effect". I travel to Asia very often and have not seen ANY evidence of this whatsoever. I discussed this once with an Indian Jeweler who said demand for Jewelry and gold had remained stable at best and even was beginning to fall. Same thing in China. I believe this demand for jewelry argument is WAY overstated. I will tell you what the Asians are spending their money on :- Harley Davidson motorcycles, Avon products, Gibson guitars etc and stuff WE use. My girlfriend was born in the Peoples Republic of China when she became 'wealthy' NOT ONE THING she bought was made of gold. She bought a BMW, a Dell laptop and an Omega watch.