Gold Price - Where is it heading?

[chops_a_must]

You could also just go for the gold itself, either with the GOLD stock or the Goldcorp call warrant ZAUWBA.

Yes, I'd say a lot of those coin collectors will be laughing in the not too distant future.

 

[Garpal Gumnut]

You could also just go for the gold itself, either with the GOLD stock or the Goldcorp call warrant ZAUWBA.

I'm holding a moderate parcel of the latter, and will probably increase it if the price starts heading up further. The spread and holding costs are a little rough though.

GP

Dear GreatPig,

I hold gold as bars and coins.

Did you buy ZAUWBA on market or through Goldcorp?

How do the holding costs affect you?

I'm considering buying ZAUWBA.

Is this warrant liquid, can it be bought and sold easily?

Sorry for the inquisition. Feel free not to answer.

Garpal

 

[GreatPig]

Garpal,

I bought ZAUWBA on the market. It's not liquid in the sense of having a lot of bids and offers, with the MM's entries often being the only ones, but they always seem to have plenty of volume available so it's always easy to buy and sell (I don't watch the warrant a lot, but I don't think I've ever seen them not making a market yet). However, their spread is usually quite wide, and if you compare the price to the GOLD stock, it's typically a bit higher. GOLD seems to have a larger number of participants, but the volumes can be quite low with large price gaps at times as well.

If you read the warrant details, you'll see it talks about some holding cost being built into the spread, and at the end of December each year they directly extract that holding cost from those who are still holding. They've supposedly worked this out somehow though so that there's no advantage in not holding on that date. I haven't studied the exact details, but I just work on the basis that there is a holding cost that I'm paying even if I can't directly see it.

The reason I use the warrants rather than certificates or bullion is because it's much quicker and easier to buy and sell. I can do it immediately through my online broker just the same as any other warrant or share. They're not real good for short-term trading though as there's no leverage. Coins are generally sold at a significant premium to the gold value in them, and I don't know if that premium would still be there if you tried to on-sell them.

If I was going to go for actual gold at all, I'd probably go for the unallocated bullion, as the holding costs are least. Generally I don't want to have to store it myself, but in case of total global meltdown , I'd keep some small bars rather than coins. My wife can buy them from Asian jewellery stores though at pretty-much market value.

GP

 

[Dr Doom]

Oh Mr. Doom. I hope you didn't miss out on this latest move, as I have benefitted muchly from your commentary here.

Sincerely,
Chops.

Thanks chops. No, I'm still over exposed to gold (stocks) but getting a bit concerned with the market generally, and what impact a correction could have on gold stocks, as every time there has been a correction gold stocks don't escape, despite the favourable fundamentals. I'm sure you'll agree we've had a stellar run in the XJO, but it will be interesting in the short term after all the reporting & ex div dates are out of the way, then long term from super changes in July. That's my plan anyway. I'm not in any rush so just waiting patiently.

Some 'mainstream' economists are starting to question whether gold trades in a free market or is being manipulated by central banks, as per this article.

http://www.sharecafe.com.au/fnarena_news.asp?a=AV&ai=3905

Of particular interest is the expansion of money supply figures quoted.

"In the meantime, central banks across the world have allowed money supply to balloon substantially. Russell notes year-on-year measures show M3 increasing by 13% in Australia, 9.3% in the Eurozone, 13% in Britain, 10.3% in Korea, and 10.7% in the US. M2 is up in China by 16% and in Russia by 45%. In other words, fiat currencies are in abundant supply."

How long can the central banks keep a lid on (the real value of) inflation (or cap the gold price), using interest rates as the broad & blunt financial sword?. To see the end game in action you only have to look at Japan to see what happens to a fully consumed society eg zero interest rates feeding global liquidity (private equity) as well as individual country fiat money supply expansion.

The next question is how much of this money is actually contributing to speculative gold buying or trading, and will it's extraction due to margin calls elsewhere have a negative impact?. Interesting times ahead.

Remember, stage 3 of the secular gold bull hasn't started yet! eg general public mania.

 

[Naif]

hello ppl..

i expect that the gold will not go below 640 , and i expect that we will see the gold in march reach 700 ..

if you look to the cot chart, you will see that the commercials and large speculators have increased their long positions for the last two weeks ..

good luck

hi again...
if we look to the cot we see an increase for the long positions for the large speculators in the last 5 weeks, and the open intrest is still rising since 30 jan , which means that we should see the gold above 700, also because of the weather the oil is in rise and the situation between usa and iran..
and if we look again to the cot chart and see how the commercials is dealing with the gold we will see that they have decreased their long positions from 127 to 105 and now they increased it to 118 which means they expect that the gold will fall from 700 - 725 to below 690 and then they will buy again..

lets see what gonna happen

cheers

 

[Dutchy3]

Thanks Naif

I'm heavy LONG gold at this point.

TA telling me that BGF LHG SP should put on weight in the immediate future.

If you don't mind, where did your list of open positions come from?

 

[Naif]

hi dutchy

you can see the data of the cot from this website:
http://www.softwarenorth.com/trading/commitmentscurrent/
and then click on GC but it will give you the data only for futures but if you subscribe with this website (i think it cost 30 us dollar) you will be able to see the data for the futures and the options..

 

[Dutchy3]

ta naif ... very interesting

 

[Dr Doom]

The real driver of gold recently?

~~~~~~~~~~~~~~~~~~~~~~
The city of Guangzhou in south China is buying gold like crazy this Spring Festival holiday, with a record nearly 8 tons in the form of jewelry, gold bars, coins and ornaments needed to meet the demand.

A local newspaper reported the price for gold continued its upward trend on the international market, hitting a 26-year high at 670 US dollars an ounce recently. But, this is apparently not enough to curb the increasing enthusiasm among consumers in Guangzhou to purchase the precious metal.

The report said jewelry stores in Guangzhou have been filled with people since the Spring Festival holiday began last Sunday. Gold bars and golden goods designed especially for the festival are the most popular in shops. As of Thursday, people have bought a total of 7.82 tons of gold in the city, breaking the record of 7.78 tons set in 2002. According to calculations, this volume could cover 100 square meters.

Some consumers believe golden merchandise is a good investment, while others hope for good fortune by wearing golden accessories.

Gold is also important as people look towards the marriage and baby booms expected for 2007.

However, experts have warned consumers that the Spring Festival holiday is not a good time to purchase the precious metal, as its price is much higher than usual. Furthermore, as the price for gold may recoil after the holiday period, people may then be able to purchase golden goods recommended by authorities on the market for much cheaper.

 

[lamborghini]

To me, Gold is the way to go in the next 0-5 years!
1) Soaring U.S. Deficit is putting pressure on US. Dollar (that just getting worse) - Good for gold though.
2) Gold Jewelry demand increasing in China, India, Japan (poulation! population!)
3) Many Governments are increasing their Gold Reserves (Less gold in the market)
Many more reasons of course,

......How do we best capatlise on Gold? Buy direct, buy gold stocks?

Q:
Can anyone tell me what ASX Gold stocks are best value or looking good besides LHG?

I like the look of OGD's Chart but don't hear much about them.

 

[BREND]

Market has a lot of reasonings as to why gold price had rallied, ie rise in oil price, rise in inflation etc. But in my judgement, all these are just noise. The main factor for the rally in gold is weakening of USD. As long as US Treasury does not have a solution for their huge budget deficit, I would continue to hold on to my gold ETFs.

 

[Nicks]

To me, Gold is the way to go in the next 0-5 years!
1) Soaring U.S. Deficit is putting pressure on US. Dollar (that just getting worse) - Good for gold though.
2) Gold Jewelry demand increasing in China, India, Japan (poulation! population!)
3) Many Governments are increasing their Gold Reserves (Less gold in the market)
Many more reasons of course,

......How do we best capatlise on Gold? Buy direct, buy gold stocks?

Q:
Can anyone tell me what ASX Gold stocks are best value or looking good besides LHG?

I like the look of OGD's Chart but don't hear much about them.

US$1000 within 12 months.

1. Agreed
2. Agreed
3. Agreed

A: Avoca Resources, AVO. Check them out and check out the AVO thread.

 

[Dr Doom]

My view is that the core drivers of gold is monetary inflation by central banks, followed by geopolitical risks, followed by jewelery consumption. While ever all 3 are fundamentally increasing and supply decreasing then gold will continue to appreciate against all fiat currencies, and is probably still behind the curve as far as fair value goes so still has some catching up to do, just don't know what the catalyst will be to get it past the (inflation adjusted) high over $2k. As per previous posts, it has clearly broken to the upside for a continuation of the secular bull, though may have a slight pull back in the short term?

 

[Jadefox]

The US Dollar Index looks like it has put in a lower high. Second area of support broken - good for gold.

 

[Sean K]

Gold coming off tonight. Profit takers cashing in.

 

[Jadefox]

Resource stocks being sold off heavily in London tonight (BHP down 5 %) - gold and silver being dragged down with them.
It won't be pretty on the ASX tomorrow.

 

[Jadefox]

Comments from Kitco forum:

"Shanghai market takes a 8 percent dump, we should feel it here today"

"The dollar's well down this AM (USDX 83.65) so it naturally follows that
gold would be down too....yeah, right. This is a full on Central Bank attack.
My guess. $700 has them worried.

For the bugs a buying opportunity. Don't forget to thank 'em for the discount."

 

[Dr Doom]

This one looks like it has legs, but could provide the last great entry for gold & gold stocks after the dust settles. Still sitting on the sidelines in cash and shorts.

 

[Dr Doom]

Briliant recovery - currency of last resort?

 

[wayneL]

Briliant recovery - currency of last resort?

My futures broker is doing well from me today... April Gold down to~680 again