Flirting With Disaster!

Tags

ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, bonds, Brian Tang, bull market, CDE, CEF, central banks, China, cobalt, Comex, commodities, Copper, crash, Currencies, currency, Currency and Currencies, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, Gold Bullion, Gold Investments, gold miners, Gold Price Manipulation, GTU, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, John Embry, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NAK, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, SWC, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

     Key Test Today! Stocks are Flirting with disaster, 8268 (DJIA) is the neckline of a head and shoulders. If (DJIA) closes beneath that, then we are definitely starting the next leg back down. Nothing to hold the freefall except some support at 8000 (DJIA) and then secondary confirmation of a new down move if breaks the next support at (DJIA) 7840, 7800, and then 7550. Take your profits now before you ride the DJIA right back down again.

     Gold and Silver however are poised to take off! If Gold successfully closes above $980 then next stop – new ALL time highs. As I mentioned yesterday hre is what I see for Gold. I predict that Gold will break $978- $980 and push up to approximately $1075 to $1090 on the first leg. We will see a normal retracement down to $950- $975 and then blast off to $1150 -$1250. I personally think with the hyper-inflation shoe about to drop, coupled with the remaining half of the derivative crunch. We can easily see $2250 to $2500 Gold by the end of the year. Keep accumulating Gold and Precious metals especially the junior and mid-tier producers. There are still companies out there selling at or below book value.

     In case you missed it yesterday here is the stock tip that I was offered along with an advisory service costing $297 year. This is the stock in their “special report”. just came across a sweet little play in the cobalt industry, supplies are dwindling fast and there will be a shortage just at the time this company comes on line with production. This company will have the only high grade cobalt production in the United States and will be able to supply approximately 12-14% of Cobalt needs for the USA. If you check out what Cobalt is used for you will understand why this stock has the potential to be a Grand Slam. Production is anticipated to be approximately 1525 tons per year with a 10yr life based on current reserves. I just received an offer to buy this tip along with an advisory service for $297 yr. I’ll give it to you for free. That’s just the kind of guy I am, LOL! The name of the company is Formation Capital Corp. Trading symbol (FCACF). I just picked up a bunch @ .35 cents/share, but as always do your due diligence, read the prospectus and company reports. If nothing else put (FCACF) on your watch list / radar. – Good Investing! -jschulmansr

Follow Me on Twitter and be notified whenever I make a new post!

Schedule automatic tweets, Thankyou for following me messages and much more! Be More Productive- Free signup… TweetLater.com

==============================================

Subject: Two trending markets revisited and analyzed for you 

Here is a video analysis of the S&P and Gold markets. The technical analysis was right on at the time, but those markets have changed quite a bit in the last few days. The S&P had a huge rally and Gold is climbing at a  steady rate, so what’s the new analysis? Glad you asked!

Below are two free videos, one on Gold and one on the S&P, that gives us an in depth technical look into these markets. Again the videos are free and very informative. Just Click on the Links Below…

          S&P Video Analysis:                                                    Gold Projections:

Also- Here’s your chance to analyze that stock you have been thinking about adding to your portfolio. Just enter the ticker of any company, name of a commodity, or forex pair and get your complimentary technical analysis. It cost you nothing and no payment info will ever be requested.

Click Here To Enter Your Symbol/s

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out: 

• ·        Who’s been driving this record bull-run in gold?
• ·        What Happens When Inflation Kicks In?
• ·        Why most investors are WRONG about gold…
• ·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault  

====================================================

 Now For some reports…

Jim Sinclair: 9 Immediate Predictions For Gold – Seeking Alpha

By: Peter Cooper of Arabian Money.net

Jim Sinclair is the doyen of gold experts. It is interesting to see a very clear timeframe for the gold price posted on his website yesterday:

1. Gold reacts as currency support for the dollar enters mid June to a slow decline (that is the official definition of a strong dollar policy, really).
2. End of 2nd week going into the beginning of the 3rd week of June Gold launches towards and this time through the neckline of the reverse head and shoulders formation.
3. Gold rises to $1224 where it hesitates.
4. The OTC derivative market takes on the dollar as short sellers into dollar support.
5. This OTC derivative currency short position builds.
6. t is the US dollar where Armstrong will get his WATERFALL.
7. The main selling takes place when Israel makes a major miscalculation.
8. Hyperinflation is always and will continue to be a currency event.
9. Hyperinflation will be a product of the upcoming massive OTC derivative short dollar raid.

“Should I be correct in the gold price action going into late June, it will fit Armstrong’s criterion for a move to $5,000”, adds Mr. Sinclair whose predictions are not always right, and who got similarly carried away last summer.

But there is the old mantra in forecasting that if you repeat something often enough then it will be bound to happen in the end.

And to be fair to Mr. Sinclair, the gold positive scenario stacking up right now does look unstoppable.

===================================================

My Note: Sounds pretty darn close to my own predictions- Amazing! 

-jschulmansr

===================================================

Gold Battle Lines Drawn at $1000 – Again —Seeking Alpha

By: James West of Midas Letter

Here we go again. The forces of legitimate money versus the incumbent purveyors of the candy floss economy squared off at the $1,000 an ounce line over which yet another battle will be fought. Arrayed against either side are formidable new elements and tried and true old ones. As usual, the first volley has been catapulted over the walls of the hucksters by the defenders of the essential timeless truth of gold’s naturally stored value against the counterfeit paper currencies.

The liabilities of the enemy have increased, and the short positions in the COMEX market are sufficiently stacked that the big bank defenders simply cannot allow gold to win decisively. G7 governments are allied against gold to a man, while emerging economic behemoths China and Russia stand in opposition.

In particular, China’s revelations that it has been in a continuous accumulation mode for the last several years and is now the fifth largest sovereign reserve of gold has created an impetus in the gold camp that has been seen lacking in the past. Institutional and sovereign investment entities now perceive a floor in the gold price based on this information, and one must beg the question as to why China would make such a revelation when it threatens to undermine the value of its $2 trillion in U.S. debt holdings.

China has also been careful to avoid buying gold on the international market, for fear, it says, of creating a stampede into the precious metals that would immediately increase the cost of its stated intention to continue accumulating gold towards the backing of the yuan (renmibi) as a global reserve currency.

Yet that is precisely what has happened. Ostensibly, the justification for tipping their hand exists in the fact that they’ve resigned themselves to the fact that selling poison toys and pet foods to Americans in exchange for a currency that loses value like light into a black hole is an acceptable if imperfect transaction. With $50 billion a year in interest payments from the U.S., they can hedge the risk buy using it to buy gold.

With the perceived floor arguably at $850, downside risk is limited in gold far more so than in U.S. treasuries, which, if mainstream media is to be taken as remotely credible, is the current favorite of safe haven investors.

‘Safe Haven’ is about to get painted with same fragrant brush as ‘AAA-rated’ investments.

Goldbugs are salivating at the prospect of vindication, but seasoned veterans of the war know that the governments and central banks arrayed against gold are not fair fighters. Since the largest players in the futures market occupy both sides of the contract, and never take delivery of the physical gold, they can orchestrate a perpetual negative sentiment towards gold by driving the future price downward by simply amping up the short positions, thus making gold appear poised for a sell-off. This has been standard operating procedure for the last decade, and it is interesting to note that ever-bigger short positions are having less influence over shorter durations before the bulls shrug off the flimsy performance and take gold higher.

Critics and observers of this U.S. Dollar image management program point to the fact that such activity, while shoring up demand for U.S. Dollar debt in the short term, effectively undermines the entire global economy, and is among the fundamental causes of financial crises such as the housing collapse and the whole current global financial fiasco.

Proponents of this manipulation, who are increasingly legion in number, correctly predict an inevitable bursting of the damn catalyzed by investment demand overwhelming the short positions, forcing them to buy and cover to limit losses, which will, in itself, stimulate the gold price even further.

With the limited oversight and feeble reporting standards of the CFTC, the ploy is facilitated by complicit (or ignorant) regulators who ensure data is obfuscated and disclosure limited. It has been this collective effort on the part of the Dollar Defenders that continuously defeats gold’s advances, repeatedly castrating the bulls and sending them whimpering to lick their wounds and regroup.

But China is now leading the charge, and the bet is that they’re willing to forgo the lost value of their USD holdings to decisively undermine the global reserve currency once and for all and replace it with the Yuan, a move that would effectively mark the beginning in the shift of the global balance of power from west to east.

The United States, overextended militarily across the Middle East and Asia, with new fronts threatening to open in Iran and Pakistan, is perilously close to an international nervous breakdown. China’s opportunity is to ride to the rescue bearing smiles and steamed pork buns while dividing up what is left of the American industrial asset pool.

Our leadership of the last decade (or more accurately, absence thereof), eager to lubricate the workings of multinational financial interests, have inadvertently played into the patient hands of their biggest creditor by prostituting the national currency shamelessly to the point where every nation in the world can see what used up piece of spent jet trash the old USD has become.

While mainstream media dismisses the idea of the Yuan replacing the dollar as the international monetary standard, those of us who have tuned out at the perception management program on CNN recognize the event as halfway accomplished.

The truly explosive moment for gold will occur when the Chinese, at their discretion, decide to spring the trap, and abandon USD completely in favor of gold, suddenly spiking the price of gold straight north in tandem with the complete collapse of the U.S. dollar.

Don’t pay any attention to the second rate hacks trying to claim credit for predicting the fall…it’s been predicted repeatedly throughout history from Nostradamus to Roubini. Any student of economic history with 20/20 vision could see this coming, and here it is. “I told you so” is a waste of time. Who’s offering a solution?

Whether or not this particular battle at the Great Wall of $1,000 an ounce is the mother of all battles remains to be seen. Desperate times call for desperate measures, and while G7 governments collude to retain power, the unforeseeable is the greatest threat to gold.

That being said, veteran observers are optimistic, to say the least.

According to Bill Murphy, intrepid soldier of gold wars and standard bearer for the Gold Anti-trust Action Committee,

 

The Gold Cartel is giving it all they have no, as evidenced by the sharply rising gold open interest on the Comex … up some 23,000 contracts on Wednesday and Thursday. They are doing all they can to counter new spec buying.

My hunch is the next time we see $1,000, and that could be very soon, gold ought to take off from there, giving us more upside dynamic daily moves. The reasons to own physical gold are off the charts … HUGE investment demand, shrinking visible central bank supply (unrelated to the cabal), shrinking mine supply, shrinking dollar, concerns over sovereign wealth debt, a horrible US economy, and a US printing press that is going flat out and will have to for some time to come.

In my opinion, all gold has to do is to stay over $1,000 for a few days, and then all kinds of bells and whistles go off.

 

Bill is not the only one who thinks the breakthrough is at hand. Bob Moriarty of 321gold.com, himself a historically prescient oracle of market crashes agrees and warns that the stock market will be the first casualty of the new financial reality.

 

If you take a look at the dollar and the long bond, it looks as if they jumped off a cliff. This isn’t gold going up, it’s the dollar and bonds going down. When the market wakes up the stock market is going to take a giant dump. No more fake rally.

 

Investors by now should be well equipped to read the writing on the wall. Whether gold breaks through $1,000 and holds there, charts new territory at much higher levels, or is beaten back down through the offices of JP Morgan (JPM), HSBC (HBC) and Goldman Sachs (GS), is irrelevant.

Gold producer stocks are up, on average, over 22% this year in the Midas Model Portfolios, while intermediate producers and close-to-production juniors have piled on gains ranging from 20 to 200%, all since January this year.

You won’t hear anybody pointing that fact out on television, and you won’t hear that from your broker, in most cases. But the lesson is clear. Gold bullion is the place to be for wealth preservation, and gold producers and explorers is where risk capital is going to see utterly stupendous gains this year.

If you buy the hype of Wall Street and Washington and wade into the general equities markets, you have nobody to blame but yourself for the heavy losses you will surely sustain.

===================================================

Claim a gram of FREE GOLD today, plus a special 18-page PDF report;

Exposed! Five Myths of the Gold Market and find out:

• ·        Who’s been driving this record bull-run in gold?
• ·        What Happens When Inflation Kicks In?
• ·        Why most investors are WRONG about gold…
• ·        When and How to buy gold — at low cost with no hassle!

Get this in-depth report now, plus a gram of free gold, at BullionVault

====================================================

 Gold vs Silver: There Is No Debate — Seeking Alpha

By: Market Sniper of We Just Trade

It is mildly amusing that when the precious metals markets are in confirmed uptrends, the perennial debate of whether it is best to own gold or silver always comes to the fore.

Both gold and silver, historically, have been money (merely utility in exchange). Gold in nature is approximately 15 times as scarce as silver. All the gold mined since the dawn of man, if molded into a cube, is said to fit inside a baseball diamond. Silver would nearly fill the stadium. China, now the world’s largest gold producer, had a silver standard as gold was more plentiful in China than silver, a bias that the west took full advantage of up through the 1870s. Silver imports by the Spanish Empire from their New World holdings were so large that it collapsed the European silver market. England, then on a bi-metalic standard, quickly switched to a pure gold standard. The Spanish Empire never recovered from the experience.

In the United States, the debate raged incessantly as to how the ratio would be “fixed” after the discovery of the Comstock Lode with western mining interests’ best known champion, Senator William Jennings Bryan, being the foremost proponent of a lower ratio. Seems it is an old debate. The good news is, you can own both. If/when the world returns to honest, stable money, you will need both: gold for the larger acquisitions and silver to make change.

While we await such an event, ratio trade the two metals to increase your holdings of precious metals.The ratio fluctuates wildly over time. In the 1970s and 1980s I used 28:1 and 40:1 as points that I would switch. At 40:1, I would be in silver. When the ratio dropped down to 28:1, I would exchange silver holdings for gold. Each time I switched, my stack of precious metals would increase in size even after dealing with the spread.

Find a precious metals dealer who will work with you on that. You maybe able to locate one that will only charge the spread on one of the metals and not both when you switch. Since then, the ratio has moved up. At one point it was even at 100:1. I now use 45:1 and 70:1 as switch points. See your tax accountant as to the benefits of such a program. Think 1031 Tax Deferred Exchange.

For those who do not want to break the rear axle of your automobile moving your silver when it comes time to switch, think about using ETFs that only reflect the price of the two metals. There are a variety of ways to accomplish this, from being in just one or the other to being long one and short the other. IF your objective is to accumulate the actual physical metals, do not use ETFs as a substitute for physical ownership. Rather, take profits from your switching trades and purchase the actual metals themselves. Gold vs. silver? No debate. Accumulate both.

Disclosure: long physical silver and gold

===================================================

A new site that is in pre-launch state that will become a virtual world – chat, shop, play, videos, etc. Anyways they are giving free shares (that should become actual company shares) to anyone who signs up and more shares if you refer people.

 ==================================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments.

Good Investing!–  jschulmansr

Going For The Gold!

Tags

ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, CDE, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, gold miners, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

As I write Gold today has touched a high so far of $1000.30! If it breaks this level and holds then $1025-$1050 will be the next stop. At this point I would buy on any dips. This run is going to take us at least to $1050 oz. cont…

**********We officially just broke the $1003 all time high! *************** ******************Market up $28.50 to 1005.00!!!***********************

cont…

After that then we will probably see a retracement potentially down to previous resistance levels now support levels.

I would not be worried at all if we go as low as $940 – $960. That would be normal market action. However a note of caution, as Gold is not necessarily following normal market action as evidenced by the dramatic run to $1000 and then down to $690 approximately.

I am still a buyer on any dips and at this point I am holding my physical gold and still getting in to some of the Gold and Silver producers who are still selling at or near book values. As far as DGP goes I am still holding my position and will let you know when I exit that trade.

Remember in the worst case scenario with Gold, you are still locking in the “buying power” of your current dollars. With Bernake running the monetary printing presses at full steam, we will see inflation return. Already the true (not government manipulated figures) inflation rate is running at 6% – 9% depending on who you are following. However, when I go to the grocery story and see a package of hot dog buns that I could buy a few months ago at $1.00 for a package of 8, now selling for as high as $4.00 for the same package; it would seem that the true inflation rate is way higher up around 12% – 18% already!

So I am still looking at “protecting my dollars”,  by converting them into Gold. You would be wise to do the same, because soon the manipulated value of the dollar will come crashing down; along with all the other major currencies as all of the central banks are printing money and trying to flood their markets with liquidity. 

As I mentioned in yesterday’s post  Gold is on a major Bull Market run and all of the movement is based on current financial pressures, still without any major news like a new war/conflict especially in the Middle East (i.e. Israel taking out Iran’s nuclear reactor), or major terrorist act. Buy gold “wholesale” thru Comex, take physical delivery, if we all do this we’ll be putting major pressure on the “shorts” and potentially cause a “short squeeze”! Then you see Gold bid up to some amazing levels and be able to jump in and make some quick profits.

“Nothing will unnerve the paper gold shorts more quickly and do more to undercut their confidence than to strip them of the real metal and force them to come up with more hard gold bullion to make good on deliveries. “Stand and Deliver or Go Home” should be the rallying cry of the gold longs to the paper gold shorts.” –Trader Dan Norcini

Otherwise, hang on to your hats as the “Gold Express” has left the station and is barreling down the tracks! – Good Investing! – jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

==================================

Gold Pole Vaults to $1000 – Market Watch

 

 

 

 

By Polya Lesova, MarketWatch

Last update: 10:07 a.m. EST Feb. 20, 2009

NEW YORK (MarketWatch) — Gold futures topped the key $1,000 mark for the first time in nearly a year on Friday, as global financial and economic worries boosted the safe-haven appeal of the precious metal.

In recent action, gold for April delivery traded at $995.30 an ounce, up $19.50, or 2%, on the day. It earlier touched a high of $1,000.30.

Stocks fell to fresh bear-market lows in early action on Wall Street, with the Dow Jones Industrial Average ($INDU:

“There is a risk here of a panic sell-off in stock markets and the next leg down in the stock bear market looks imminent, as the ills of the global financial system virulently infect the global economy,” said Mark O’Byrne, executive director at Gold and Silver Investments Limited, in a research note.

“While gold has become overbought in the short term, its medium and long term fundamentals are as sound as ever,” he said.

Gold for February delivery, the front-month contract which registered very little volume, was last up $19.30, or 2%, at $995.40 an ounce on Globex. The February contract expires on Feb. 25. Earlier, February gold hit an intraday high of $999.50 an ounce.

On Thursday, the Dow industrials finished at 7,465.95, down 89.68 points to end at the weakest level since Oct. 9, 2002.

“The price slide of U.S. equities, with the Dow Jones Industrial Average falling to its lowest level since October 2002, should result in a continued positive mood of investors on gold,” said Eugen Weinberg, an analyst at Commerzbank.

Also on Globex Friday, March silver futures rose 46 cents, or 3.3%, to $14.39 an ounce, and April platinum futures gained $12.50, or 1%, to $1,089.00 an ounce.

March palladium futures gained 40 cents, while March copper futures fell 5 cents, or 3.5%, to $1.42 a pound.

Polya Lesova is a New York-based reporter for MarketWatch.
==============================

Gold has a “True Bull Run” – Financial Post

Source: MineWeb.com

 

 

Gold was, at the time of writing, close to $1,000 again. It would seem this level is inevitable sooner rather than later and this time the yellow metal may spend rather more time in the four figure area.

Author: Lawrence Williams
Posted:  Friday , 20 Feb 2009

LONDON – 

As this article was commenced, the gold price was at $997 and seemingly inexorably headed towards breaching  the US$1,000 level once again.  Indeed by the time you read this it may well already have done so.  April futures had already marginally gone through the $1,000 level.

The big question is, assuming spot gold does push through $1,000, will this be third time lucky for the gold bugs?  Gold has breached $1,000 twice beforehand and on each occasion its climb into the four figure level was shortlived.  This time it may well be a different situation with the likelihood that the price is poised to go higher still – and maintain its position above $1,000 for some little time to come.

Gold’s dollar high of $1,033.90 was achieved seemingly a very long eleven months ago but only remained at this exalted level for a few days , before crashing back.  Indeed as stock markets began to collapse and then plunged in the second half of the year, much confidence was lost in gold as an ‘insurance policy’ as it fell back to the high $600s at one stage, but the realisation came about that the main reason for the price decline was that funds and institutions were having to liquidate any tradable assets to meet their commitments, and gold s nothing if not tradable at any price.

Gold soon recovered and started a steady run back up to current levels despite rising markets and a strong dollar – usually both signs of a likely weakness in the gold price.  Indeed gold broke new price records in virtually all currencies other than the US dollar and now it looks highly likely to do so in terms of the now not-so-mighty greenback itself.  Meanwhile stock markets in general have started to fall back again as the world realises that the various stimulus packages worked out by clutching-at-straw governments are unlikely to improve matters drastically and much of the world heads for depression – or something approaching one.  There is no doubt we are already in recession in the West and depression is just the next, and infinitely more dangerous, phase of the current reality.

Gordon Brown has certainly not saved the world, and Barack Obama’s deification status is already tarnished after only a few days in office.  It is becoming apparent that what the politicians and economists with clout feel could be remedies to what is facing us ahead are nothing but untried and unproven stopgaps which patently are not working – or not at least yet.

Meanwhile banks are digging themselves further and further into the mire with more collapses and nationalisations likely, countries will default on their commitments and matters will continue to deteriorate unless some financial miracle happens.

Indeed the only world saviour may yet be China, but at what cost?  There are indications that the Chinese may have been in part responsible for the depth of the fall in commodity prices by halting industrial plants and infrastructure spending ahead of the Olympic Games and not resurrecting it afterwards as it could see an advantage in keeping prices down.  But the Chinese did not foresee the collapse in the western financial system exacerbating the situation dramatically and the global downturn came back to bite the Chinese in the bum as its exports crashed and huge numbers of people were thrown out of work – a potential cause of serious unrest.

Beijing has since taken steps to resurrect its infrastructure programmes.  Projects which were lying idle are at full swing again, but this is too little too late for much of the rest of the world. It may serve to keep China itself out of recession – and perhaps throw a lifeline to commodity producers to help them maintain output and support prices, but it’s definitely too late for much of the rest of the global economy which is in a frightening downward spiral.

But – with regards to securing commodity supplies and controlling future markets we are seeing China, with its huge funding capabilities, tieing up supplies, making major strategic investments in mining and metallurgical companies – and also in some other important western entities – and also providing loans to enable what they see as potential strategic partners stay in business.  But again, as we saw in yesterday’s European Nickel announcement on finance, there are China-benefiting clauses in most of these ‘strategic’ agreements.

It was Alfred Lord Tennyson in one of his Arthurian epic poems who used the phrase “The old order changeth, yielding place to new” and that is extremely apposite phraseology for what is happening now.  US economic imperialism has started to be replaced by a Chinese version.

But what has this to do with the gold price?  Because the Chinese were perhaps too late in re-implementing their own stimulus, which could have mitigated the global downturn at an earlier stage and possibly eased its speed, depth and perception, the realisation that gold could actually be the best way of protecting one’s assets began to filter through to previous unbelievers in the yellow metal. 

This has shown itself in the unprecedented inflow into metal purchases and ETF holdings which seem to be accelerating as the crisis deepens.  Never mind the fall-off in Eastern investment grade jewellery demand and the big rise in gold scrap sales.  ETFs are picking all this up (and global gold production is falling anyway).  But no matter, investment strength is always driven perhaps more by perception than by fundamentals (at least in full-scale bull or bear markets) and the current thought seems to be gaining more and more ground that gold is about the only serious safe haven out there.  The dollar may have proved to be a good bet of late, but everyone knows that pumping out money will ultimately be inflationary – and gold is traditionally a great inflation hedge too.

Indeed what gold is doing now is demonstrating that all western currencies are weak, rather perhaps than that gold fundamentals are strong, and the currencies are all devaluing against gold which is regaining its position as ultimate money – a position which believers say has never gone away!

So what of the performance of gold while this article was being written.  Well the price pulled back a little from the brink of bursting up through the $1,000 level and is, at the time of writing, sitting at $994 again, but the overall upwards drive for the moment seems unstoppable as financial news elsewhere continues to deteriorate.  Once gold goes through $1,000 this time it is not unreasonable to suggest it should perhaps stay there for a lot longer than last time – and maybe there is the prospect of a far higher peak.  Gold metal, ETFs, stocks and funds could have a way to run yet.

========================

Have A Great Day! – Good Investing! – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

========================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

 

 

 

Gold has a ‘true bull run’

This ‘bubble is still being blown up,’ analyst says

Jonathan Ratner, Financial Post  Published: Thursday, February 19, 2009

 

 

 

 

 

 

 

 

 

Safe-haven demand and a lack of investment alternatives continue to help gold break from its traditional trading relationships, rising toward a new record, despite a strong U. S. dollar and weak crude oil prices.

In fact, analysts at Genuity Capital Markets noted that gold has been trading more than US$200 per ounce above its normal value relative to the greenback. The firm also pointed out that the opportunity cost of holding bullion has diminished, with treasury yields at record lows and demand fundamentals deteriorating in the broader commodity and equity markets.

“Gold’s run since autumn, 2008, has been a true bull run, rising despite the strength of the U. S. dollar and outperforming virtually every other commodity and currency class,” said Canaccord Adams analyst Steven Butler. He told clients that bullion has set recent new highs in euros, pounds and Canadian dollar currency terms, among others.

Canaccord raised its peak gold price by another US$150, to US$1,100, now that gold has broken through the firm’s previous target of US$950.

“It is fair enough that gold may be in a bubble, but we think the bubble is still being blown up,” Mr. Butler said.

While credit risk has fallen from its recent highs, he noted that it is as elevated as during gold’s first peak last March, which coincided with the collapse of Bear Stearns. However, gold is still below the US$1,003 high set about a year ago.

Meanwhile, inflation may not be registering yet in terms of near-term expectations, but Canaccord believes that it and a general devaluation of paper currencies will be the result of the concerted monetary and fiscal policies to reflate the global economy.

Gold is known as a measure of real assets value because of its ability to preserve value during inflationary times. However, during disinflationary times like these, the current global growth and demand landscape also supports the notion of too many dollars chasing too few gold ounces, according to Ashraf Laidi, chief market strategist at CMC Markets in London.

He noted that the equity/ gold ratio has fallen about 85% from its 1999 peak, which occurred when gold stood at 20-year lows and equities reached their highs at the top of the dot-com bubble. Just as the equity/gold ratio stands at 18-year lows, the ratio of total financial assets to physical gold is near the low end of its historical range.

Mr. Ashraf also pointed out that the world’s available gold stock stands at only 5% to 6% of total global stock and bond market valuation.

Sustained investor interest in gold throughout 2008 helped push U. S. dollar demand for bullion to US$102-billion, a 29% annual increase, according to the World Gold Council. Its Gold Demand Trends report said identifiable investment demand for gold, which incorporates exchange-traded funds (ETFs), bars and coins, rose 64% last year. This is equivalent to an additional inflow of US$15-billion.

Genuity noted that holdings of the largest gold ETF, SPDR Gold Trust (GLD/NYSE), have increased by 26% since the beginning of 2009. So while bullion held in depositories on behalf of gold ETFs continues to grow from record levels, price volatility is an important consequence on both the upside and downside.

The ease of investing in gold via ETFs is matched by the ease of disinvestment, said Jeffrey Nichols, managing director of American Precious Metals Advisors.

“Just as quickly as gold-ETF depository holdings have grown, so might they shrink when sentiment changes,” he told clients.

This has already contributed to short-term volatility and may do the same for the long term, given that gold’s ultimate peak could be much higher than many had expected.

jratner@nationalpost.com

======================================

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!,

no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

======================================

 

Gold stocks are flavour of the month again amongst major analysts – MineWeb

Source: MineWeb.com

 

The recent strong performance of the gold price vis a vis weak stock markets in general is again making gold stocks attractive to institutional and individual investors.

Author: Steve James and Euan Rocha – Analysis
Posted:  Friday , 20 Feb 2009

NEW YORK (Reuters) – 

The prospects for equity markets and numerous sector indexes have dimmed during the global recession, but gold and the companies that mine it have not lost their luster.

With gold prices nudging their all-time high and energy and other costs falling, mining company profit margins are widening, making their shares attractive, analysts said on Thursday.

“Within the next year, we will see the gold stocks sell at significant premiums to traditional earnings measures or net asset value measures,” said Robert Lutts, chief investment officer of Cabot Money Management in Salem, Massachusetts, which manages $400 million of client assets.

“I have owned Barrick Gold for one reason only — because it has the biggest pile of gold in the ground,” Lutts said of the world’s biggest gold producer, Canada’s Barrick Gold (ABX.N Quote)(ABX.TO: Quote).

“New interest continues in this increasingly attractive sector,” JPMorgan analyst John Bridges wrote in a note. “We feel all funds should have a core long position in the metal or the equities.”

Moreover, analysts expect acquisitions in the gold sector to accelerate, as larger players pounce on their cash-strapped smaller colleagues, in a bid to grow their asset base.

“I believe in investing in both bullion and stocks,” said Jeffrey Nichols, managing director of American Precious Metals Advisors. “Large companies with strong cash positions are in a good position to take advantage” of a higher gold price.

Lower fuel, raw materials and equipment costs, combined with weaker Canadian and Australian dollars and a flight to gold as a safe haven, have spurred gold miners’ stocks recently.

The gold and silver index , which comprises major U.S. and Canadian gold mining stocks, has more than doubled over the last four months. Spot gold was selling for $978.80 per ounce in New York on Thursday, closing in on its all-time high of $1,030.80 from last March 17.

“At these levels, we’d encourage new investors to begin by buying a little Newmont,” Bridges wrote, after Newmont Mining Corp (NEM.N: Quote), the world’s No. 2 gold producer, reported better- than-expected fourth quarter results.

Since most major gold players no longer hedge production, they stand to gain from the recent run-up in gold prices.

Nichols touts Barrick and its Canadian peer, Goldcorp Inc (G.TO: Quote). “In general, I like Barrick and Goldcorp because they are well managed, with management you can trust, providing a good return on investment.”

Credit Suisse analyst David Gagliano saw Newmont as an attractive investment after its solid fourth-quarter results.

“Newmont is entering the sweet spot,” he wrote in a research note noting higher production, lower costs and lower capital expenditures due to the proposed start-up of Boddington, which will be Australia’s biggest gold mine.

“Add to this the favorable gold backdrop and declining raw material costs, and we believe Newmont is set up nicely for a strong 2009,” wrote Gagliano.

Peter Spina, who operates Goldseek.com, a website for investors, said now is the time to invest in gold miners.

“I think mining companies are looking a lot better,” he said. “With costs down, the profit margins are expanding and people are saying: ‘Where should I invest in this market?’ The gold mining companies are the place to be.”

Spina noted that capital markets appear to be opening up.

“We are now seeing more competition for capital where three months ago it was impossible,” he added.

Spina likes the junior players, such as Denver-based Gold Resource Corp (GORO.OB: Quote), which is developing projects in Mexico.

Genuity analyst Tony Lesiak expects larger gold players to swoop in on some of the smaller miners.

“Merger and acquisition activity in the gold sector could be poised to accelerate,” Lesiak said.

He cited the improved outlook for precious metals, the disconnect between larger companies and cash-starved juniors, and a paucity of internally available quality growth projects.

Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier, favored unhedged miners.

“Most producers have an unhedged book, but rising production, such as at Goldcorp and Kinross (Gold Corp (KGC.N: Quote)(K.TO: Quote,) are what come to mind,” he said.

(Reporting by Steve James, Euan Rocha and Frank Tang in New York and Cameron French in Toronto; Editing by Andre Grenon)

© Thomson Reuters 2008. All rights reserved.

==========================

In a previous post I gave you a partial list of Tier 1, Tier 2, and Tier 3 mining companies and their websites. Then in another post I gave you questions you should ask when you are doing your due diligence before making any investment in the stocks of these companies and those mentioned in today’s post. Clicks on the links to view.- jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

=================================

Gold Sector: Mergers and Acquisitions Set to Soar – Seeking Alpha

Source: FP Trading Desk

The gold sector could see a flurry of takeover activity in the coming months, according to Genuity Capital Markets analysts Tony Lesiak, Christine Healy and Michael Gray. With that backdrop, they have broken down a number of potential targets.

They believe that 2009 could be a big year for gold M&A for a number of reasons: rising bullion prices, the growing valuation disconnect between juniors and seniors, recent financings by the seniors, and a shortage of internal growth projects for the seniors.

So who could get bought? The analysts ranked 10 junior gold producers and 20 junior development companies on the unusual measure of estimated total acquisition cost per attributable, recoverable ounce.

 

On that basis, the top three producer targets are Allied Nevada Gold Corp., Mineral Deposits Ltd., and Kirkland Lake Gold Inc. (KGLIF.PK), while the top junior development targets are Andean Resources Ltd. (ANDPF.PK), Colossus Minerals Inc. (CSIMF.PK), Comaplex Minerals Corp. (CXMLF.PK), Gabriel Resources Ltd. (GBRRF.PK), and Osisko Mining Corp. (OSKFF.PK).

 

“We recommend a basket approach to investing in any of these names given the speculative and single-asset nature of the companies,” they wrote in a note to clients.

With the exception of Gabriel, these are all companies that are often considered takeover targets. Gabriel has problems with NGO opposition in Europe, but the analysts figure that if the company can ever get government approval for its Rosia Montana project, it would be a logical target for Newmont Mining Corp. (NEM).

The most likely North American buyers in this market include Newmont, Barrick Gold Corp. (ABX), Kinross Gold Corp. (KGC), Eldorado Gold Corp. (EGO), and Alamos Gold Inc. (AGIGF.PK), they wrote.

========================================

Decoding What Gold is Telling Us – Seeking Alpha

By: Simit Patel of Informed Trades.com

Well, gold bugs around the world have been having a good chuckle of late, as the market is re-affirming the often eccentric and practically religious views of gold bugs: gold is up over 11% for the year in US dollars, and up over 4% over just the past five trading days. Which begs the question: why? There are a few possible answers to this question:

1. Deflation. This crisis is global, and everyone is flying to safe stores of wealth. Over the big picture of human history, gold has served as the best store of wealth — and thus gold is rising. In many ways this is the classic “gold is money” argument, one typically championed by Austrian economists. Robert Blumen has offered an excellent explanation of this argument.

2. Inflation. Gold is typically a hedge against inflation concerns, and as the US federal government continues to aggressively “stimulate” the economy, the rally in gold may be a reflection of increased concerns regarding inflation.

So which one is it?

In my opinion, both. With that said, I view inflation as the larger concern, as I have said many times before. If the environment were truly deflationary, Treasury bonds would be the true recipients of flight to quality, as well as dollar holdings in FDIC insured banks. Instead, 20+ year Treasury bonds have fallen by more than 13% thus far (as measured by TLT). Negative correlation between TLT and precious metals suggests inflation, not deflation. The chart below illustrates.

click to enlarge

Deflationists will point to the fact that the US dollar may be strengthening relative to other fiat currencies — although this is not necessarily a reflection of deflation, as it could simply be interpreted as weakness of all global currencies, all of which are falling against gold. More relevant may be the rise in PPI and energy prices in January of 2009. While one month alone does not provide sufficient evidence for a substantive reversal in macroeconomic trends, it is not consistent with deflation, and may suggest that the Fed’s inflationary actions in the second half of 2008 may be kicking in.

Conclusions for Trading

The recent activity in the market has led me to make the following revisions:

1. The forex market is increasingly a trader’s environment, perhaps even a daytrader’s environment.

2. Gold and silver may retrace, perhaps even by several hundred dollars, though I would view it as an opportunity to buy on dips. The global economy is getting worse and conditions are being aggravated by the actions of central bankers. As a result, the fundamental case for gold and silver will get stronger.

3. Counterparty risk is rising — this strengthens the argument for increasing the physical delivery portion of one’s precious metals portfolio.

4. Because of inflation concerns, my bias is against short positions in all asset classes. If I were a trader of stocks or commodities, I might look into shorting positions relative to a broader index (i.e. short a particular stock while going long the sector ETF, under the rationale that the stock will do worse than the entire sector).

5. Oil’s behavior has been quite peculiar; I’ve yet to find a convincing explanation for why it’s moving the way it is. As it escapes my fundamental analysis, and as I find it less appealing than currencies from a technical analysis perspective, I’ll stay away from oil.

6. As gold becomes too expensive for many, silver will grow in appeal. And as silver fell more than gold during the second half of 2008, it may be set for a larger rally.

Disclosure: Long gold and silver.

 

 

 

 

========================================

Short Stories: Anglo American, Rio Tinto, Xstrata, Alcoa – Seeking Alpha

By: Jessica Johnson of Short Stories

Anglo American (AAUK), the mining and natural resource company, presents its results today and according to the Financial Times, its CEO, Cynthia Carroll, may face some tough questions. Falling platinum, diamond and copper prices have taken their toll on Anglo’s profit margins, and analysts will be looking for signs of progress from Ms. Carroll’s cost-cutting drive.

As you can see from this graph of Anglo’s shares outstanding on loan (%SOOL), there has been a recent increase in the short position of the stock, which, over the last ten weeks, is up from 1% to 2.2%. However, this is still a small percentage, compared to Xstrata (XSRAF.PK) (for example), which has just under 10% of its SOOL. Xstrata and Anglo’s other rival Rio Tinto [RIO/LSE] (RTP) have recently used a rights issue and a cash injection from China to shore up their balance sheets, whereas Anglo has manageable debt levels. RIO currently has 1.5% SOOL, which is up from 0.7% in January and down from 2.7% in December.

 

 

Anglo American:

click to enlarge

Xstrata:

click to enlarge

Rio Tinto (UK Listing)

click to enlarge

The S&P 500-listed stock Alcoa Inc. (AA), which produces aluminum (partly through the mining industry), has seen a rise in its %SOOL. It is up from 2% in October, but down from 8% ten days ago and currently stands at to 6%. This is in line with a fall in its share price, which over the last six months has fallen from $30 to $7. A particularly severe fall in price occurred between September and October when the stock fell from $30 to $10. Since that time, short investors have continued to take profits as the price ebbs around the $10 mark.

click to enlarge

Disclosure: None

=======================

My Note: With the exception of Alcoa, I think some of these Short traders are going to lose their shirts especially as Gold continues it’s Bull Stampede!- jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

============================

Third time lucky for gold – the ultimate money? – MineWeb 

 

 

 

 

Dow Jones Industrial Average

S&P 500 Index

$INDU 7,336.68, -129.27, -1.7%) off more than 100 points, or 1.5%, at 7,357, and the broad S&P 500 index ($SPX: $SPX 764.48, -14.46, -1.9%) down 10 points, or 1.4%, at 768.

METALS STOCKS

Gold tops $1,000 for first time in nearly a year!

Need A Second Chance?

Tags

ANV, Austrian school, AUY, Bailout News, banking crisis, banks, bear market, Bollinger Bands Saudi Arabia, Brian Tang, bull market, CDE, central banks, China, Comex, commodities, Copper, Currencies, currency, deflation, Dennis Gartman, depression, DGP, dollar denominated, dollar denominated investments, Doug Casey, economic, economic trends, economy, EGO, Federal Deficit, financial, Forex, FRG, futures, futures markets, gata, GDX, GG, GLD, gold, gold miners, hard assets, HL, hyper-inflation, IAU, India, inflation, investments, Jeffrey Nichols, Jim Rogers, Keith Fitz-Gerald, majors, Marc Faber, market crash, Markets, Michael Zielinski, mid-tier, mining companies, monetization, Moving Averages, NGC, NXG, PAL, palladium, Peter Grandich, Peter Schiff, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, Sean Rakhimov, silver, silver miners, SLW, small caps, sovereign, spot, spot price, stagflation, Technical Analysis, TIPS, U.S., U.S. Dollar, volatility, warrants, XAU

Gold today is trading on Feb Contract between $975 – $985 oz, a little more consolidation and base building before the launch to $1000+.  Currently Gold is up $3.80 at $982.00. The push to $1000 could come as early as today. Do you need a second chance? Well here it is- get into Gold now or you’ll be kicking yourself later.  If Gold breaks the $1003 all time high then we’ll see at least $1050 gold, if it breaks that we have a straight shot to $1100 – $1250. This is without any major news, such as Israel attacking Iran nuclear facilities, or China moving in and taking back the disputed territories in India, or a major terrorist attack event like 911. If any of those happen then $1500 or greater. True Inflation Rate while still roughly 7-8% could easily jump to 12 – 18% or higher, as the printing presses around the world are spinning out of control around the world. This eventually will lead to even more devaluation of all the currencies as Governments are madly trying to stop Deflation. The Gold market is saying the stimulus packages around the world are failing. Buy a wheelbarrow to haul your cash around and Gold to preserve the buying power of your Dollars. Even if you only allocate 10% of your portfolio- BUY GOLD NOW! As Always Good Investing – jschulmansr

Here is where I buy my Bullion, get one free gram of Gold just for opening an account! Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

==========================================

Gold Continues to Climb as Economic Catastrophe Looms – Seeking Alpha

By: John Browne of Euro Pacific Capital

 

Last week, when Congress passed its $787 billion stimulus package, the size of the plan caused many observers to forget the water that has already passed under the bridge. Fewer still are wondering what havoc will erupt when all this liquidity eventually washes ashore.

 

 

 

With gold prices only 7% away from their record highs and the main equity indices 45-50% below their highs, an analysis of the equity/gold ratio is amid the many rationalizations for prolonged gains in the precious metal. The equity/gold ratio highlights a commonly used measure of corporate market value versus a decades-long measure of real asset value. Gold is known as a measure of real assets value because of its ability to preserve value during inflationary times. But during these disinflationary times, the current global growth/demand landscape also supports the notion of too many dollars chasing too few gold ounces.

 

 

 

The questions can be separated into three general topics: Corporate, Projects, and Capital.

 

 

 

• How did the company get started?
• What are the company’s near-term, mid-term, and long-term goals?
• How much experience does the management, board of directors, and technical team have in achieving the company’s goals? Is there a past history of success?
• How does management plan to market and promote the company? Does the company plan to go on road shows? Do they plan to do newsletter, magazine, or website advertising?
• How much of experience does management have in promotion?

Projects

• How many gold projects does the company have? Are all of the gold projects considered assets?
• Where are they located? Are they located in geopolitically safe regions? Are they easily accessible? Is there a labor force nearby? Is there easy access to power and water?
• What stage is each property in: Grassroots? Exploration? Development? Production?
• For grassroots stage projects, why does the company wish to pursue exploration? Has there been any historic evidence of gold on or near the projects? What does the company have planned for the future of its grassroots projects?
• For exploration stage projects, what kind of exploration progress have been made so far? How much has the company drilled? What have been the results? What kind of exploration is planned for the future? Is there currently a resource estimate? Will there be one in the future?
• For development stage projects, what is the status of development? When will the project become a gold producing mine?
• For production stage projects, how much gold does the mine produce? What are the future production and revenue expectations? How long is the life of the mine?
• What is the resource or reserve status of each property?
• What, if any, royalties are or will be due?

Capital

• What is the company’s cash flow, if any?
• What is the company’s cash position?
• Does the company have any debt? How much and what kind of debt does the company have?
• Will the company need to raise new capital for future projects? How much money will the company need to raise? How much experience does management have in raising new capital?
• How much capital will the company need to reach its 12-month goals? How will they get the money?
• What is the company’s monthly burn rate? Are they being responsible spending it?
• How many shares of the company’s stock are issued and outstanding?
• How many shares of the company’s stock are there fully diluted? At what price are the warrants and options set?

This is not a stock-specific list, so these questions are best used as a guideline to form your own questions for investor relations.

This is also not a complete list, but should definitely be enough to get you started. If you like a company’s answers to the questions above, it should be more seriously considered as a position in your junior gold stock portfolio.

Good Investing,

Luke Burgess and the Gold World Staff

P.S. The opportunities in the gold market have already proven to be huge winners for readers of our Mining Speculator advisory service. As a matter of fact, for five years running the Mining Speculator portfolio had an average gain of 212%! Most of these gains can be attributed to Greg McCoach’s expertise in picking junior gold mining stocks, which, as we’ve just discussed, are getting ready to explode. And we’re expecting even bigger gains from the gold mining stocks in the Mining Speculator portfolio over the next 24 months. That means there’s never been a better time to become a member of Mining Speculator and get in on the tips and information for which some people invest millions of dollars with hedge funds. Click here to find out how you can join us in the Mining Speculator for as little as $25.  

========================================

EGO: A Particularly Healthy Gold Stock – Hard Assets Investor

By: Brad Zigler of Hard Assets Investor

Real-time Inflation Indicator (per annum): 7.5%

We wrote about gold stocks last week (“Whither Gold Stocks”) , waving a $38 red cape for the Market Vectors Gold Miners ETF (NYSE Arca: GDX) in front of a four-month-old bull market. Yesterday, as gold picked up $10, GDX’s horns got close. Very close.

 Intraday, the ETF traded as high as $37.80 before falling back to close at $37. The fund is working itself into the target area nicely, thankyewverymuch. One of GDX’s better-performing component stocks, in fact, might be a herald of the fund’s future.

 El Dorado Gold Corp. (NYSE Alternext: EGO) has risen 11.4% this year, just barely ahead of the 9.2% gain posted by GDX. Oh sure, a 2.2% performance difference may seem significant now, but given the relatively low volatility in both securities, the spread seems unlikely to widen much. Barring something unforeseen, of course.

 

 

Gold Miners ETF (GDX vs. El Dorado Gold (EGO)

 

The good news for EGO and, indirectly, GDX, is EGO’s cost structure. For fiscal 2008, EGO’s cash cost of gold is only $257 an ounce. Volatility in bullion prices is least likely to impact EGO,  compared to its peers.

E-G-O could spell peerless performance for GDX. 

=====================================

My Disclosure: Long EGO (El Dorado Gold)- jschulmansr

===============================

Gold Breaks from Traditional Trading Versus Oil and USD, Looks Strong – Seeking Alpha

Source: Financial Post Trading Desk

Safe haven demand and a lack of investment alternatives continues to help gold break from its traditional trading relationships, rising despite a strong U.S. dollar and weak crude oil prices. In fact, analysts at Genuity Capital noted that gold is more than $200 per ounce above its normal value relative to the greenback.

Meanwhile, sustained investor interest in gold throughout 2008 helped push dollar demand for bullion to $102-billion, a 29% annual increase, according to World Gold Council’s Gold Demand Trends. The organization also said identifiable investment demand for gold, which incorporates exchange traded funds (ETFs), bars and coins, rose 64% last year. This is equivalent to an additional inflow of $15-billion.

Genuity also pointed out that the opportunity cost of holding bullion has diminished, with treasury yields at record lows and demand fundamentals deteriorating in the broader commodity and equity markets.

Concerns about the stability of the global banking system and credit rating of the U.S. Treasury has been a major driver of physical demand for gold. Until clear evidence of stabilization in the global financial system emerges, analysts at Genuity expect this trend to continue.

“If the U.S. dollar weakening resumes in the medium term, as we believe it shall, and oil prices improve, gold should continue to prosper,” they said in a research note. As a result, Genuity continue to recommend gold over base metals in the near term.

Aram Shishmanian, CEO of World Gold Council, said:

The economic downturn and uncertainty in the global markets, that has affected us all, is unlikely to abate in the short term. Consequently, I anticipate that gold, as a unique asset class, will continue to play a vital role in providing stability to both household and professional investors around the world.

North American gold equities have risen more than twice as much as gold itself in the past month, showing stronger than typical leverage. Silver has also begun to outperform.

Genuity highlighted Silver Wheaton Corp. (SLW) was a name that provides leverage to the metal and has the potential for a re-rating.

The firm’s top gold picks in the intermediate space are Allied Nevada Gold Corp. (ANV), IAMGOLD Corp. (IAG) and Northgate Minerals Corp. (NXG). It also favours seniors Goldcorp Inc. (GG) and Yamana Gold Inc. (AUY). The firm also raised its target prices for gold stocks by an average of 28% to reflect higher price assumptions for the metal.

Genuity said:

While our target multiples are now mainly near the top of the typical valuation range (1.0x to 1.7x), we believe that continuing positive momentum in the gold price should support further outperformance from the gold equities.

With the arrival of fourth quarter and year-end earnings season, one area of reporting that will see additional focus is the updates on gold reserves.

RBC Capital Markets expects gold producers to increase the gold price assumption used to calculate reserves from the previous range of $550-$575 per ounce to $675-$725. This will better match the three-year historical gold price as suggested for use by the SEC.

“With this increase, we expect most producers should be able to more than replace gold reserves mined during 2008, and show net gains from the end of 2007,” RBC analysts told clients.

===========================================

My Disclosure: Long AUY, NXG, SLW – jschulmansr

Need a Second Chance? – Well Here It Is – Buy Gold and Invest In Yourself…

Good Trading! -jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

=====================================

Nothing in today’s post should be considered as an offer to buy or sell any securities or other investments; it is presented for informational purposes only. As a good investor, consult your Investment Advisor/s, Do Your Due Diligence, Read All Prospectus/s and related information carefully before you make any investing decisions and/or investments. –  jschulmansr

 

Gold prices are quickly on their way to breaking another all-time high this year.

 

 

 

“uhhh…yeah…sure….this is investor relations” 

In whatever form you find investor relations, they should be able to give you all of the most up-to-date information. Or they should at least be able to tell you where to find any information they don’t have.

To help you get the most out of speaking to investor relations of junior gold companies, Gold World has made a basic list of questions that you should be sure ask.

And an expected parabolic rise in investment demand will throw the gold bull market into the long-awaited mania buying phase, which should last between 6 and 12 months and could push gold prices as high as $3,000 to $5,000 an ounce, maybe higher.

That means right now is the time to start seriously researching and buying back all those quality junior gold stocks that have collapsed over the past few months.

How To Pick the Right Junior Gold Stocks

The best place to start research on a company is its website. There, you’ll generally find most of the information that you need. However, more often than not, you won’t be able to find all of the detailed information. And that’s when you need to call the company’s investor relations department.

Investor relations for junior gold companies are sometimes one or two in-house employees of the company. Other times investor relations is contracted out to a third party. Or sometimes it will be a member of management. And sometimes there is no formal investor relations at all; sometimes investor relations is just whoever picks up the phone…

 

Corporate

 

click to enlarge

 

The equity/gold ratio (using the Dow or S&P500) has fallen about 85% from its 1999 peak, which occurred when gold stood at 20-year lows and equities reached their highs at the top of the dot-com bubble. Since the 1920s, the equity/gold ratio has peaked twice at nearly 35-year intervals: 1929 to 1965, and 1965 to 1999. After each of those three peaks, stocks descended in multiyear sell-offs, accompanied by a rally in gold. But the converse was not true when stocks recovered in 2003-2007. As the above chart shows, the 2002-3 start of the commodity-wide bull market failed to prevent the equity/gold rally from extending its decline.

The 100 years of equity/gold analysis indicate each peak in the ratio was followed by a full retracement back to the preceding lows. The emerging fundamentals indicate a recurrence of this trend and the equity/gold ratio has further declines ahead until a possible recapture of the 1980 lows. In 2002-2007, the falling ratio emerged on a rally in both equities and gold, albeit a faster appreciation in the latter. From 2008 to the present, the persistent decline in the ratio emerged on a combination of a divergence in the pace of declines (slower fall in gold than in equity indices) or divergence in the direction (rising gold and falling/neutral equities).

In assessing the interaction between gold and monetary assets, it is worth weighing in on the current gold rally by comparing the amount of gold available versus the creation of monetary assets. Just as the equity/gold ratio stands at 18-year lows, the ratio of total financial assets to physical gold is near the low end of its historical range. Additionally, The world’s available gold stock stands at a mere 5-6% of total global stock and bond market valuation, which is about 4 times lower than in the 1980s. It is no coincidence that the difference between today’s gold/equity ratio and that of the 1980 low was also 6 times greater.

The Road Ahead

A return in the equity/gold ratio towards the cyclical lows of 1980 is highly plausible. Rather than simply arguing this point on the basis of further declines in equities (see Tuesday’s note in my website on long term equity cycles), the prospects for prolonged gold rallies are emboldened by the refuge towards the metal as a yield substitute resulting from emerging depreciation in the secular value of currencies. And as we have seen in 2005-7, returning rate hikes pose no challenge to gold.

Instead, higher rates are accompanied by improved global growth, resurging demand for industrial commodities and a broader backdrop for the precious metal. The all time lows of 1980 in the Dow/gold and S&P500/gold ratios stood at 1.33 and 0.18 respectively, compared to the current levels of 7.8 and 0.81. Assuming a return in the ratios to their 1980 lows, these would have to fall by another 75%-80%. Taking a more conservative scenario of a 50% decline in the equity/gold ratio and a target gold price of $1,250-1,300/ounce, the implied value of the Dow and the S&P500 would stand at 4,500-5000 and 500-520 respectively.

=====================================

How To Pick Junior Gold Stocks – GoldWorld

Source: GoldWorld.com

 

The latest spending, signed into law yesterday by President Obama, came on top of $300 billion committed to Citigroup (C), $700 billion for TARP 1, $300 billion for the FHA, $200 billion for TAF and some $300 billion for Fannie (FNM) and Freddy (FRE). Just over the last six months, which excludes the initial Bush stimulus and several massive, unfunded Federal guarantees, nearly $5 trillion has been committed by the government to the financial industry. Rational observers cannot be faulted for concluding, despite Administration claims to the contrary, that the government is merely throwing money at the problem.

Although the rhetoric has managed to convince many observers of the possibility of success, the gold market appears to clearly understand the implications of this unprecedented spending.

The feeling that the government has no idea how to proceed has created palpable panic. In response, pragmatic investors are seeking the ultimate store of wealth. In 2009, as has occurred countless times throughout history, that store will be stocked with gold. Thus, whether the Federal government’s interventions will succeed or fail will be anticipated by the price of gold. Right now, the market is screaming failure.

Prior to the latest round of Federal spending, the Federal government had committed $4 trillion to postpone bank collapses and to lay the groundwork for subsequent restructuring. But has any of this activity actually rescued the banking system? In light of the evidence of deepening recession, is it likely that the additional $787 billion in the latest stimulus will instill enough confidence to restore economic growth? If not, what damage will it do to the eventual recovery?

Congressional rescue packages rarely work. Nevertheless, Congress is turning up the heat with previously unimaginable increases of government debt to fund stimulus and rescue packages. Senator McCain rightly describes the scheme as “generational theft”. Each package of debt will encumber many future generations, halt restructuring and also threaten latent hyperinflation.

While Congress claims that the seriously over-leveraged economy is in desperate need of restructuring, it appears blind to the fact that deleveraging will encourage such restructuring. Instead, Congressional leaders actively seek to increase leverage and add debt. They warn of fire, while pouring petrol on the flames.

The seriousness of the situation is magnified by the rapidly increasing scale of the problem. Just today, the release of the latest minutes of the Federal Reserve confirmed that even that bastion of eternal optimism is sobering. The American economy, which shrank by 3.8 percent in the last quarter of 2008, is forecast to decline by some 5.5 percent in the first quarter of this year. In some pockets, the unemployment rate is already in double figures. Despite massive Government spending on rescue and stimulus, the American consumer clearly is becoming increasingly nervous, and the credit markets show few signs of recovery.

With bad news only getting worse, investment markets are turning into quagmires. The Dow Jones Average is testing new lows, and the commodities markets show few signs of life. In such times, the price of gold should fall along with the prices of other assets and commodities. But, the reverse has occurred. In the past two months, gold has staged a remarkable rally. This is despite the activity of price-depressants such as official gold sales by the IMF and official ‘approval’ for massive naked short positions to be opened by new ‘bullion’ banks.

Not only have gold spot prices risen in the face of such selling pressure, but the price of physical gold is now some $20 to $40 per ounce above spot. This would indicate that investors are now so nervous that they are insisting on taking physical delivery.

Make no mistake, the economy will not turn around soon. When the recovery fails to materialize, look for governments around the world, and especially in the U.S., to send another massive wave of liquidity downriver. When it does, the value of nearly everything, except for gold, will diminish. Don’t be intimidated by the recent spike in gold. Buy now while you still can.

======================================

As I have been saying Buy Gold Now! – jschulmansr

Catch the New Bull! – Buy Gold Online – Get 1 gram free just for opening account!, no minimums – Buy Safely, quickly, and at low prices, guaranteed! – Bullion Vault.com

=====================================

Equity / Gold Ratio’s 40 Year Cycle – Seeking Alpha

By: Ashraf Laidi of AshrafLaidi.com

Iranian Nuke Scientist: Weekend Quake was a Nuclear Test – Defense/Middle East – Israel News – Arutz Sheva

Tags

agricultural commodities, alternate energy, Austrian school, banking crisis, banks, bear market, bear stearns, bull market, capitalism, central banks, commodities, communism, Copper, deflation, depression, diamonds, dollar denominated, dollar denominated investments, economic, economic trends, economy, financial, futures, futures markets, gold, gold miners, hard assets, heating oil, inflation, investments, Iran, Israel, market crash, Markets, mining companies, missles, natural gas, Nuclear Weapons, oil, palladium, physical gold, platinum, platinum miners, precious metals, price, price manipulation, prices, producers, production, protection, recession, risk, run on banks, safety, silver, silver miners, socialism, sovereign, spot, spot price, stagflation, timber, U.S. Dollar, volatility, Water

Iranian Nuke Scientist: Weekend Quake was a Nuclear Test – Defense/Middle East – Israel News – Arutz Sheva

by Hillel Fendel

IsraelNN.com) A weekend 5.0 Richter earthquake in Iran was actually a nuclear bomb test, says an Iranian nuclear scientist claiming to be working on the project.

The report is an Israel Insider exclusive.

This past Saturday night, southern Iran experienced what was reported as a significant earthquake – a seismic event measuring 5.0 on the Richter scale. Its epicenter was just north of the strategic Straits of Hormuz, which separates Iran from Abu Dhabi and Oman and which is the gateway to the Persian Gulf.

The report quotes an Iranian nuclear scientist who claims to be working in uranium enrichment for the project, and who said that the “quake” was acutally an undergound nuclear bomb test.

Israel Insider adds that the test/quake was actually the second in a series. Nine days ago, a 4.8 Richter scale event occurred, with its epicenter only five kilometers away from the weekend tremor.

The Israel Insider source reports that two nuclear rockets are currently ready – and are intended for use against Israel in the coming months.

If the report is correct, it would belie previous speculation that Iran would not begin nuclear testing until it had more nuclear-bomb production capability.

The geographical location of the test has several advantages. It is exposed to significant seismic activity, which could serve to mask nuclear tests; it is believed to be close to Iran’s nuclear development facility; delivery and transport of material and personnel can be effected easily through the Hormuz Strait; and Iranian enemies would hesitate to bomb the area because that would threaten the flow of a substantial percentage of the world’s oil.

Reuters reports Thursday morning that Iran has begun building a line of naval bases along its southern coast and up to the Straits of Hormuz.

 

My Note: If this is true then Israel will have no choice but to attack soon! If that happens there is no telling how high Oil and Precious Metals will go! Might be time for a little portfolio insurance/protection… jschulmansr