Gold Price - Where is it heading?

[bankit]

If the physical decoupling is real though, I see gold stocks as a good way to still get a leveraged entry to physical gold, because they do actually produce the real thing. They might present better leverage than futures especially if this backwardation situation continues to get amplified.

Hi Cuttlefish,

That is what I am banking on, investing in unhedged gold producer stocks. Not explorerers or developers but unhedged gold producers. As gold moves up the leverage becomes the icing on the cake. Sure there can be currency concerns but we can not avoid that.

Just in case some readers have not thought about the leverage issue. As an example, let's say a producer whose cost is USD500 an oz, then currently they are making a profit of USD338 an oz. If the price of gold goes to USD1680 then their profit (with all things being equal) is USD1180 or an increase of 250% when the price of gold has only doubled. So the share price should move up in much the same manner.

Bankit

 

[So_Cynical]

So the share price should move up in much the same manner.

That's what i thought to....however the last 18 months has proved that to not be so.

March 08 was the record high for gold but not for the producers, they all had there
SP record highs well before....sentiment proved to be the all powerful SP driver.

 

[chatty]

Hi Cuttlefish,

That is what I am banking on, investing in unhedged gold producer stocks. Not explorerers or developers but unhedged gold producers. As gold moves up the leverage becomes the icing on the cake. Sure there can be currency concerns but we can not avoid that.

Just in case some readers have not thought about the leverage issue. As an example, let's say a producer whose cost is USD500 an oz, then currently they are making a profit of USD338 an oz. If the price of gold goes to USD1680 then their profit (with all things being equal) is USD1180 or an increase of 250% when the price of gold has only doubled. So the share price should move up in much the same manner.

Bankit

Hi Bankit

I am holding LGL. How do I find out which company is an unhedged producer? Can you suggest some names?

Thanks

 

[GumbyLearner]

Unhedged Producers

NCM (Aussie)
Newmont (USA)
Gold Fields (S.Africa)
Sino (Aussie)
Avoca (Aussie)
Kinross (Canada)
Yamana (Canada)
Harmony (S.Africa)
to a name a few...

The biggest producer in the world Barrick (Canada(formerly Homestake Mining)) trades as ABX on the NYSE is still hedged.

But you need to check out any copper contracts or associated metals produced by the individual companies...I hope this helps

 

[explod]

That's what i thought to....however the last 18 months has proved that to not be so.

March 08 was the record high for gold but not for the producers, they all had there
SP record highs well before....sentiment proved to be the all powerful SP driver.

Of course, but gold is about the same price today as it was 12 months ago whilst most other investments have fallen substantially. Gradually insitutional investors are picking up this vibe which will change sentiment to the upside. As I have been saying for 6 months now, gold will shine early in the new year, the stock markets will fall further and the sentiment to gold will shift substancially to the gold producers. Charts as we look at them have shown a bottom turnaround on most of the Aussie gold stocks and volumes are rising. look at the 12 month daily charts of SBM, AVO, LGL and GOLD

 

[bankit]

Hi Bankit

I am holding LGL. How do I find out which company is an unhedged producer? Can you suggest some names?

Hi Chatty,

You need to go through the Company reports to find all those that are unhedged - there are some that have puts but this is not hedging.

You also need to keep in mind that you want pure gold producers not stocks that have, say, a significant proportion being copper or another mineral as this skews your objective.

Grumbylearner has started off with a good list.

I concentrate on Australian stocks and apart from AVO,NCM and Sino from his list I can add:

DOM
IAU
LGL
SBM

Bankit

 

[chatty]

Hi Chatty,

You need to go through the Company reports to find all those that are unhedged - there are some that have puts but this is not hedging.

You also need to keep in mind that you want pure gold producers not stocks that have, say, a significant proportion being copper or another mineral as this skews your objective.

Grumbylearner has started off with a good list.

I concentrate on Australian stocks and apart from AVO,NCM and Sino from his list I can add:

DOM
IAU
LGL
SBM

Bankit

Thanks Bankit. This helps a lot

 

[Sean K]

Hi Bankit

I am holding LGL. How do I find out which company is an unhedged producer? Can you suggest some names?

Thanks

Here's an outdated list of gold stocks for you to peruse. For the producers, in the comments section I have stated whether they are hedged or not, for the most part.

Update their prices to see market caps and comparative value.

 

[Garpal Gumnut]

I've always bought physical gold.

I don't trust gold companies.

Look what happened to sons of gwalia.

Perth Mint I find are best.

Wrap it up before you bury it.

gg

 

[Sean K]

Wrap it up before you bury it.

gg

What do you wrap yours up in GG?

And where?

Cheers.

 

[Ageo]

I've always bought physical gold.

I don't trust gold companies.

Look what happened to sons of gwalia.

Perth Mint I find are best.

Wrap it up before you bury it.

gg

Why is Perth the best? for price? delivery? purity? i actually dont like dealing with Perth as there prices are way too high. (but they have alot in stock so they can talk the price up).

 

[Ageo]

What do you wrap yours up in GG?

And where?

Cheers.

A cloth of some sort is always good, and of course he means burying it in the ground

 

[Garpal Gumnut]

What do you wrap yours up in GG?

And where?

Cheers.

I normally wrap it in free trials of tip sheets from Huntleys, The Intelligent Investor or The Eureka Report.

It keeps me grounded and anything I plant I like to surround with some s**t.

Next time I need my garden dug up I'll tell you where.

I find Huntleys good for roses as well.

gg

 

[Sean K]

A cloth of some sort is always good, and of course he means burying it in the ground

Yes, and I want to know where?

 

[Garpal Gumnut]

If I bury it in cloth, Garpaldog digs it up.

He won't go near Huntleys, Intelligent Investor or The Eureka Report.

He's smarter than most , is Garpaldog.

gg

 

[noirua]

Gold is probably a good gamble should those with paper gold demand delivery. Some think this may happen during 2009, thus US$1,500 an ounce may be closer than we think.

 

[MRC & Co]

Long AUD Gold today for a bit of a Christmas punt. :chimney

 

[sinner]

It is my understanding that gold needs to close above 850 this month for the monthly chart to remain bullish. I would prefer an 855 on the monthly for Dec to confirm the bullish breakout of downward trend.

Working the nightshift tonight, I noticed gold rebounded nicely from the 830-840s region up to 850 in European trading and with an hour of shift to go I quickly checked the gold price to see it soared to 866 during the US session!

So Whiskers, since you were right on the last jump and following retracement down almost to the exact dollar, I will ask you very nicely for your opinion on this one!

I will be calling Aus Bullion on Monday to place my last order (just 1 oz at this damned AUD price!) for the year. I generally try and convert some portion of monthly earnings to gold regardless of price.

 

[So_Cynical]

I concentrate on Australian stocks and apart from AVO,NCM and Sino from his list I can add:

DOM
IAU
LGL
SBM

Bankit

TRY - Troy Resources

ASX listed, unhedged, debt free and producing....also 60+ mill in cash

 

[tigerboi]

Re: Gold Price heading up up up

soon you will be able to also buy gold from hillend gold...HEG,with the usa economy in a tailspin looks like gold is still the safe haven...my prediction is $1500 by june 2000...tb

Physical gold demand has increased dramatically over the past year with gold dealers and
mints unable to maintain supply, so Hill End Gold has decided to make a portion of its gold
production available to investors, with shareholders getting priority.
We are pleased to announce that preparations are underway to have gold investment bars of
various weights refined to 99.99% from Hill End gold, which will available for shareholders
and the public.
These gold investment bars will be stamped Hill End Gold and will be tradeable at near to
their gold value on the global gold bar market.
Recently the World Gold Council reported that demand for gold for the third quarter of 2008
was US$32 billion, which is 45% higher than the record set in the previous quarter, and retail
investment demand was up 121% to 7.5 million ounces, with strong bar and coin buying in
the Swiss, German, and U.S. markets.
At the same time the supply of physical gold gold has decreased 9.7% compared to the
same period last year with central banks reducing gold sales.
The details of the release of the Hill End gold 99.99% investment bars and the pricing​

structure will be announced shortly when finalised.