Re: GOLD Where is it heading?
rederob
As for "reinstating hedges" - some producers that have maintained a so-called prudent hedge positions may lock in some high prices going forward. They will also have seen the disadvantage they are at compared to their peers, so while the analysts say this, the companies may not take up the offer.
Of course, that may well be the case. However, if I was a CEO of a gold producer, I would be in contact with other CEO's within the industry, particularly the larger producers, to find out their thoughts. If one does, I suspect all will.
However unless you definitively know the answer, you are speculating.
The problem, being that if they do start "hedging forward production" again, that will impose very heavy selling pressure, that will not effect a "short-covering" scenario with a speculative price rise.
bvbfan
No, I do not know the origin of the "ducati" brand.
Your hypothesis is an interesting one however.
The ETF by all accounts does hold that amount of physical gold.
Although, I must admit I haven't seen it in the vault myself. The regulation of ETF's by the SEC is stringent and I would not concern myself on this point.
Gold as a currency, is a non-starter.
Gold restricts economic growth, and as a tool for commerce, is just not practical. It will never again be a currency, not even in a armageddon scenario.
wayne
Re intrinsic value: I've questioned this point myself, never to have had it satifactorily answered. Intrinsic value could be deemed to be the cost of production. But this varies from mine to mine. The 450oz nugget that I tripped over while photographing needle nosed warblers (true, I really did dream that) has no intrinsic value by that measure. Besides someone has to be willing to pay that. Which gets us back to instrinsic value being what someone is prepared to exchange for it, what they are prepared to pay.
Intrinsic value, is the earning power of the asset.
Take a simple example; a house.
The intrinsic value is the "rental cash-flow" discounted, into *years into the future. Therefore assume a 4 bedroom house, @ $110/week and 8% interest
Intrinsic value = $286,000.00 or $71,500.00 per bedroom
On that basis, what is the intrinsic value of gold?
Gold pays no interest,
Gold has no earning power,
Its capital value, like all assets fluctuates, but lacking any earning power, there is nothing to stop it falling to zero.
The entire value of gold, like cash, resides in the confidence of people believing in the availability of exchange for goods and services.
A house, may fetch 10 eggs, 1 loaf of bread, and a good massage per/month, per/room, and that then becomes its intrinsic value.
This is where I diverge strongly with your views (as you have come to expect ) Technicals are the only sensible way to trade this beast, stop or no stop...especially leveraged to the eyeballs. Traded on fundamentals, and considering the volatility, I would trade an underlying quantity of no more than 50 - 100ozs. Whereas technically I am prepared to trade an underlying quantity of 500-2000 ozs...short, long whatever. I know which strategy, for me, would come out in front over the long haul, and by a long, long way.
Gold, pure speculation.
As a speculative play, use a speculative tool, viz. Technical analysis to play in the market, so actually we are in agreement. Its just as a fundie, I wouldn't touch gold at all, it holds no interest for me as an investment.
jog on
d998