Gold

[Skol]

the investors that see 700-800oz Gold are F'kn dreaming as it would wipe the sector out no production no more gold = more demand

Lots of goldbugs have this strange idea that gold can't crash to $700/$800 because the mines will close down.

Exactly correct, the mines will close down, gold is already one of the most despised punts on the planet, when it gets to $800 no one will want it = no demand.

One EWT theorist in the book 'Gold Bubble' theorises that gold could drop to $252 an ounce. = $4 silver.

[Skol]

That's on par with $10,000 gold, ridiculous talk. I'm a firm believer in charting like the above DOW/GOLD ratio above. We are in a middle ground right now with no direction. The next few months will determine where it all goes. Don't subscribe to silly talk; try to find a middle ground between the two extremes and use knowledge to back it up

Let me quite you from 'Gold Bubble':

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However, if the entire move since 1999 has been a fifth wave of a larger wave counting back to 1968, prices may drop to the low of wave 2 of our larger 5th wave(starting in 1999) - a much steeper plunge to the low $252.80 an ounce.

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Looks like round 2 has begun, gold $1450, silver $23.50

[Skol]

Lots of goldbugs have this strange idea that gold can't crash to $700/$800 because the mines will close down.

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Gold Mining Firms "Should Think Unthinkable" About Gold Prices - 2 May 2013


FOLLOWING last month's drop in precious metals prices, gold mining companies should "think the unthinkable" about the price they can expect to get for their output, investment bank Credit Suisse has said.

Investors should also reappraise their expectations about gold and silver prices, a research note published by the bank this week says.

"For both investors and producers," the note says, "it is time to think the unthinkable. In practice that means modeling the effects that a sustained period of $1300 gold and $17.00 silver would have on portfolios, operating margins and cash flows."

April's sharp gold price fall has hit a number of gold mining projects, with world's biggest producer Barrick Gold cancelling at least half a billion Dollars of spending on major projects this year.

The biggest US producer Newmont meantime reported first quarter earnings this week of 71 cents per share, compared to the average estimate among analysts of 76 cents a share. Over the first quarter of this year, Newmont's reported 'average consolidated costs' were equivalent to $758 per ounce produced, a 22% increase on the same period last year. Between 2010 and last year, operating costs went up 40%, the company revealed.

Last month, metals consultant Thomson Reuters GFMS estimated that by its proprietary all-in costs measure, which includes operating costs and other costs such as administration, the average cost-per-ounce across the gold mining industry was $1211 an ounce in 2012.

However, "we think it important to remember that one thing that distinguishes gold from commodities is that it can trade below theoretical levels of marginal cost support for a very considerable time, and has done so in the past," says Credit Suisse.

Gold miners have focused too much on increasing production rather than profits in recent years, fund manager Evy Hambro, who manages BalckRock's commodities funds, said this week.

"Gold miners will become a barbarous relic without change," Hambro told an audience in London, echoing a phrase used by John Maynard Keynes to describe the gold standard, though he noted that some firms have listened to shareholders and promised to increase dividends.

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[Skol]

S&P500 smashes through 1,600 to set another all-time high, while gold stagnates after better than expected jobs report, another nail in the gold coffin. DJIA might break through 15,000 as well tonite.

Unfortunately for the goldbugs, the world economy is progressing reasonably well after the GFC and isn't in the Schiff after all. Meanwhile Jim Sinclair continues to peddle the yellow stuff and tries to tempt the world's suckers by saying gold's going to $50,000. Talking of suckers, the massive amount of coin sales recently to housewives may indicate that the retail sector is in on the great global gold scam and that the run-up in gold prices for the last 10 years is definitely over.

Despite the coin sales gold isn't going anywhere and gold ETF disinvestment continues.
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Gold price seen plunging to $1 200/oz over coming year

By: Leandi Kolver

3rd May 2013

The gold price is expected to continue falling to as low as $1 200/oz over the next year, after what seemed to be an unstoppable climb over the past 12 years, says investment company Rezco Asset Management investment director Rob Spanjaard.

He adds that Rezco attributes the drop in price mainly to a large number of exchange-traded funds being liquidated.

“The primary problem is that there was speculative money in gold, which is currently being withdrawn. As soon as the gold price stops rising, speculative investors start changing their minds.

“In this sense, when the gold price stopped rising, it was a warning sign of potential prob-lems to come,” he says.

In addition, the environment for gold, with central banks printing trillions of dollars, also added to the problem, he says. “If the gold price is no longer rising in that environment, it could, really, only fall.”

Spanjaard believes that the gold price will stay low for a couple of years, as gold that was accumulated for speculative purposes has to find its way into “strong hands” again.

“Also, the gold price has been climbing for more than ten years and experience in investment markets shows that no commodity will continue to climb indefinitely.”

Meanwhile, he advises individual investors to wait a while longer before buying gold.

“You have to look at where the gold price started – at $250/oz in 2001, from where it climbed to almost $1 900/oz in 2011. While gold currently feels cheap, compared with those highs, one has to remember the price from which it started.

“If you look at the price drop in perspective, it is not that severe and could fall even more,” he explains.

Therefore, potential investors should wait for the price to settle down and the investment cycle to turn.

While gold has previously been regarded as a safe haven for investors, Spanjaard states that a diversified portfolio would currently be the safest option.

“With gold climbing from $250 to $1 900, investors were confident that the price would continue to rise and it made them feel comfortable; however, this is probably when a commodity is at its most dangerous.

“Therefore, investors should rather invest in various commodities so that their portfolios are not too severely affected by a drop in price of a specific commodity, such as gold,” he concludes.
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[JBmurc]

gold ETF disinvestment continues......Oh no all that leased gold that has 10 different owners will go to 9 ...LOL

Gold -1470oz

[Skol]

gold ETF disinvestment continues......Oh no all that leased gold that has 10 different owners will go to 9 ...LOL

Gold -1470oz

Well if it's true, which I doubt, now's the time to bail out while the going's good.
Goldbugs love their conspiracy theories, because without them there's no need for gold.

Here's the weirdest I've heard. One guy says that when aircraft are leaving a condensation trail behind them the CIA are seeding the population with some chemical. As one of the biggest users of kerosene on the planet I reassured him that the filters would block up and the fuel system would go into bypass mode, the pilots would be alerted and they would have to land, especially if more than one engine went into bypass at the same time.
The conspiracy theorist reckons that the filters are specially CIA designed filters.

Hahahaha, you gotta laugh and wonder about the sanity of some of these dudes.

[BIRMANBOY]

So below is some information that those interested may be aware of or not. Courtesy Wikipedia. It does put a bottom line on the gold price question from the point of view of no-one is likely to sell below their cost of production. I did a rough calculation and they avg out at 615 usd per oz. It is common practice to mine low cost areas of the mine when gold price is lower and the reverse when high thus saving the best areas for 'tough times". Also of interest is that mines operators use high gold price times as an opportunity to write down assets etc thus creating lower tax obligations. So it would be reasonable to assume that last year when gold prices were high..higher cost areas of the mine were utilized. This would suggest that 615 is on the high side. In an ideal world companies produce a product, add an acceptable margin and ensure theit competiveness, profitability and longevity. There is such a large gap between gold price production costs and its actual retail price that one can assume that speculators and self interested parties are pushing prices beyond "normal" business reality. This would make gold as a metal such a bad investment unless you happen to be lucky enough to buy in at the right moment. As an investment in shares gold miners are removed from the driving end forces but also ultimately affected by all that speculation. Who'd want to be in such a speculative area always in the back of my mind. Gamblers all.
The Big 10

Rank	Name	Base	Revenue mil.USD Ytd Dec 2012	2008 cap bil $	2012 cap bilUSD	profit mil USD Ytd Dec 2012	2012 production tonnes	Reserves Moz	Total Resource Moz	Cash Cost 2012 year US$ total/oz
5	AngloGold Ashanti	South Africa	6632 4.2%[28]	11.61	16.7[29]Feb.28	849 46.9%[28]	111.81 [28]	74.9 [13]	264.30	1009 [28]
9	Eldorado Gold	Canada	1147.541 4.0%[38]	3.03	10.59[39]	318.054 8.4%[38]	18.69 [40]	18.61 [41]	20.2	483 [38]
6	Yamana Gold	Canada	2336.762 7.5%[30]	6.09	13.0[31] Feb.27	442.064 19.4%[30]	33.71 [30]	19.4 [13]	46.35	525 [32]
1	Barrick Gold	Canada	14,547 2.2%[10]	26.90	49.0[11] Feb.10	(665) 4484 in 2011[10]	210.4 [12]	138.5 [13]	226.92	584 [10]
2	Goldcorp	Canada	5435 1.4%[14]	21.63	39.0[15] Feb.7	1749 7.0%[14]	67.93 [16]	46.3 [13] 60.1 Feb'11 [17]	81.59	638 [14]
3	Newmont Mining	United States	9868 4.7%[18]	18.23	29.09[19]Mar.02	2118 117.9%[18]	141.1 [18]	85.0 [13]	142.67	677 [18]
10	Polyus Gold	Russia	2800 22%[42]	9.00	10.1[43]Feb.06	980.526 71.1%	47.57 [44]	74.1 [13]	211.92	694 [44]
7	Kinross Gold	Canada	4311.4 12.2%[33]	11.14	11.5[34]Jan.20	(2509.7) loss (2013.0) in 2011[33]	74.2 (2012)[33] Kinross 65.14, RB 11.40 ('10)[35]	59.17	92.06 Kinross 74.8 Red Back 17.26	706 [33]
8	Gold Fields	South Africa	3530.6 1%[36]	7.51	11.26[37]Jan.21	724.2 33.0%[36]	92.25 [36]	78.9 [13]	270.28	784 [36]
4	Newcrest Mining	Australia	3879 13.4%[20][21]	10.01	26.0[22] Feb.14	793 30.8%[20]	58.77 (2012)[20] 77.44 (2011)[23] NC 50[24] Lihr 25[25]	77.0 [26]	205.45 Newcrest 119.2 Lihir 86.234	A$973 [27]

Sources and other information

• 2008 ranking Gold Strategist
• total resource [1]
• 1 tonne = 1000 kg = 2204.6 lbs = 35,273.9619 ounces; 1 ton = 2000 lbs = 32,000 ounces
• Newcrest Mining started including Lihir Gold assets in mid-2010 (revenue and profit changes are based on pre merger assets in 2009 and merged assets in 2010).
• Goldcorp reserves are from January 2010 and so it does not take into account the acquisition of Andean Resources (September) which increased proved gold reserves by at least 2.1 million ounces (not including the 20.6 million ounces of silver) ^[45] and may not include the sale of 21.1% of the Morelos gold project in Mexico with a total resource of 3.0 million ounces (agreed in December 2009 but completed in February 2010).^[46]
• Metrics such as cash costs, revenue for years prior to 2011 were changed due to the transition in accounting standards from Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards.^[47]
• For 2012 Barrick Gold's overall losses can be attributed to a $4 billion writedown on copper assets incurred during the final quarter.
• 3 of the companies took on major writedowns on their assets in the last quarter of 2011 and that affected their annual profits (Newmont $1.6B, Kinross $2.94B, Agnico-Eagle Mines $644.9M).
• Newmont operates Australia's two biggest gold mines, Boddington and Kalgoorlie.^[48]
• On July 25, 2011 Polyus Gold and KazakhGold merged.
• Only Yamana, Kinross, and Polyus Gold produced more gold in 2012 than 2011. In 2011 it was Newmont, Newcrest, Kinross and Eldorado that produced more.

[Skol]

Attachment 4492Warren Buffett's Berkshire Hathaway reports a 51% increase in profit, shares at record price. While Goldbugs prepare for the end of the financial world as we know it Buffett gets on with the job.

From Bloomberg:
This earnings report is the tip of the iceberg,” Bill Smead, portfolio manager of the Smead Value Fund, which owns Berkshire shares, said in an interview in Omaha. “Warren has organized the company around the rebirth of the United States economy over the next 10 years and this is the beginning of that rebirth.”

[stanace]

I am not a great believer in the gold conspiracy theories, though some of them make a good case, I didn't like it when USA said it would take 7 years to give Germany back its gold. (Or maybe I read that wrong). What confuses me is that the price of gold and the price of silver and the price of platinum all seem to be connected. Every time gold moves, whether up or down, the others follow, apparently immediately.(Or is it the other way round?) Could anyone explain this rationally without some simplistic explanation such as, that is the markets outlook on the economy at that point in time. There must be more to it than that.

[BIRMANBOY]

Its impossible to supply a rational explanation to something that is driven by emotion. This is ultimately the biggest issue and fundamental problem with PM's.

I am not a great believer in the gold conspiracy theories, though some of them make a good case, I didn't like it when USA said it would take 7 years to give Germany back its gold. (Or maybe I read that wrong). What confuses me is that the price of gold and the price of silver and the price of platinum all seem to be connected. Every time gold moves, whether up or down, the others follow, apparently immediately.(Or is it the other way round?) Could anyone explain this rationally without some simplistic explanation such as, that is the markets outlook on the economy at that point in time. There must be more to it than that.