Gold Stocks - buying the break...

Discussion in 'Commodity Futures' started by ukxgerard, Jun 13, 2006.

  1. Hedge Funds employ PR people to talk up this Jewelry Demand crud. How do I know? I used to work for one. Hedge Funds absolutely MUST have a real measure of regulation not just the SEC saying:-
    "It would be nice if you were registered with us"
    #11     Jun 18, 2006
  2. bl33p


    That is true, the extra asian demand for gold is definately rubbish. The indians are so fickle they will definately not buy at peak prices, and the chinese are not exactly stupid either. It's just a metal and should be relegated into its commodity position together with copper and other industrial metals.

    New low target at $125.
    #12     Jun 18, 2006
  3. How ya doin' bl33p!

    I actually just finished writing a report which took me 3 months to write, where I used available statistics on
    1/New mines coming on line
    2/Old mines ramping up production
    3/Technology which allows Un-manned/Un-womanned (err ...just being PC) submersibles to prospect (easier to do with GPS, ultra-sonics bathometric sonar etc now than EVER before)and gather gold from sunken WW2 Japanese and German submarine cargo's, spanish galleons etc
    4/ New process of extracting GOLD from seawater, yes! SEAWATER<<<<Check it out "Google it"
    Remember there is a SH**LOAD of gold coins, 24k pure gold artifacts, ingots etc under the waves.
    Pricing in demand destruction and other factors like the Federal Reserve etc I have a valuation of gold at US$164 in but we have to take into account "The Speculative Premium" or the "Moron Premium".
    People will always play MUSICAL CHAIRS with gold and property.
    At least you can live on a property. When was the last time you heard of sleeping on or eating a bar of gold? Or using it to warm you on cold nights or cooling you on hot balmy days.

    Of course you will find it difficult to melt a womans heart without a GOLD pendant or ring but lately Hedge Funds are storing it in bulk at Warehouses these days.
    Which warehouses? I know one group which until recently provided storage facilities to a Hedge Fund that basically bought the pure metal:-


    #13     Jun 18, 2006
  4. I even remember during the Internet "bubble" Normandy Mining (which was Australia's then largest gold mining company as well as holding at one stage about 70% of Australian Magnesium Corporation) mentioning in their 1999 annual report that gold was an "e-metal" I will try to locate it and quote the nonsense spouted therein.
    In short there will always be people who are very bullish on gold. And they will always invent reasons why it "MUST BE" worth more an ounce than ANY substance on this planet!
    Hedge Funds create a one way momentum and gradually sell into the rally created by the same momentum.
    Remember it was only 5 or six years ago gold was around US$250 an ounce and some futures contracts were far lower.
    Must have been a LOT of Jewelry being made in China when gold was $600-700 an ounce rather than when it was at $250 an ounce for some reason given the Yuan exchange rate hasn't changed against the US$ in the last TEN years.
    #14     Jun 18, 2006
  5. zdreg


    your argumemt seems tp be that gold can gp dpwn in price while gold mining shares will not or they may go even up. is there any historical basis for such a conclusion?
    #15     Jun 18, 2006
  6. No shot....Not in our lifetime.
    #16     Jun 18, 2006
  7. How are ya zdreg!
    Gold mining companies were still VERY profitable when gold was at US$250. Ones in Australia were were trading at less than ten times earnings paying dividend yields at around 7%!...and that was when gold was at $250-270 an ounce! It was sub three hundred an ounce for many years.
    Gold stocks are valued by placing a nominal value on their tenements, cost of production, money made at whatever spot value the price of gold is at that point in time etc
    If a particular lode is very high grade but the cost of production from that mine exceeds the economics of the excercise then it isn't mined. This happened a lot when gold was $250-270 an ounce but when it spikes to 300-400-500-600-700.....well its different story...... New mines come on line
    There has been a bull market in gold many times when the actual metal was actually quite cheap. The reason........

    >>>>Increased Productivity as a result of the development of new technologies which make extraction more efficient<<<<<<<
    #17     Jun 19, 2006
  8. this report, u wouldn't want it to be sitting on a shelf somewhere, right? any unused e-copies by any chance?

    seems gold is ripe for another puking fest round! crawled back up to 570 but v.unconvincing!
    #18     Jun 19, 2006
  9. it'd be nice if GLG would move back up to 31.64 that way i can break even. This stock has been a piece of crap lately.

    - nathan
    #19     Jun 19, 2006
  10. serg007


    I would suggest to try GDX. This is relatively new ETF corresponding to the Amex Gold Miners Index ($GDM). Includes 45 stocks (diversified much better than XAU or HUI), liquid enough (yesterday daily volume 366000 at average price 34$).
    Of course it is possible to pick some individual names (that was exactly what I had been doing before GDX launch). But now it is possible to take the sector risk, not the individual stocks' risk, and personally I am more comfortable with this.
    By the way I too think that the correction in gold and gold-miners stocks is about to finish and we are on the verge of the big move up.
    #20     Jun 20, 2006