Mining for Metals
S&P's Leo Larkin says the recent spike in gold and other metals prices is "unsustainable," but he still likes a trio of stocks
Investors have taken quite a shine to metals stocks lately, as the prices of gold, silver, and copper rally on reports of strong demand and supply disruptions. Political tensions, such as this week's news that Iran is pressing ahead with its nuclear-enrichment plans, have also sparked safe-haven buying of commodities.
The gains have been eye-popping. The cash price of gold ran up to $598 an ounce in mid-April, from $517 at the start of the year, while gold futures spiked to $602 before pulling back a bit. There has even been market talk of the yellow metal heading to fresh records of around $800 -- or even higher. Meanwhile, copper futures have also shot up to record highs (see BW Online, 3/30/06, "Metals Are Burning Up the Market").
GOLD AND STEEL. Along with underlying strong global economic growth, heavy flows into commodities funds are driving metals stocks higher, says Leo Larkin, analyst at Standard & Poor's Equity Research who has followed metals companies for the last 11 years. "It's feeding itself -- as more money goes in, the prices go up," he says.
Among the stocks he covers, Larkin has buy recommendations on gold producers Newmont Mining (NEM ) and Barrick Gold (ABX ), as well as steel company U.S. Steel (X ).
BusinessWeek Online's Karyn McCormack recently spoke with Larkin about the rally in metals. Edited excerpts of their conversation follow:
Note: Leo Larkin is a Standard & Poor's Equity Research analyst. He has no ownership interest in or affiliation with any of the companies on which he writes research. All of the views expressed here accurately reflect the analyst's personal views regarding any and all of the subject securities or issuers. No part of the analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this story.
Why are gold and other metals spiking higher lately?
The metals I follow are gold, copper, nickel, aluminum, and steel. With respect to copper, aluminum, and gold to some extent, some of what's driving the price is commodity-fund investments. In the case of aluminum and copper, the pure supply fundamentals don't support current prices.
Nickel and gold have a little more support in terms of the mine supply and consumption equation. Part of what's driving the prices is the strong global economy -- it's partly China and now also Japan, as well as continued growth in the U.S.
Do you think metals prices will keep rising? How come?
The trend is up for metals prices, but not at these rates, particularly for copper and aluminum. That's because of the reasons previously mentioned -- the supply-demand situation -- and there's a lot of money that has been shifted to commodities. It's feeding itself -- as more money goes in, the prices go up.
What about the news that Iran is pressing ahead with its nuclear program?
Even if the threat didn't exist, the trend is for higher prices. All that's doing is forcing an underlying trend.
What's your target price for gold?
For this year, we think gold will average $560 to $565. It could end the year at $600 and maybe higher. I expect gold and other metals to pull back and consolidate from current levels. These gains are just unsustainable. At some point, it will collapse as supply enters the market and commodity funds begin selling off their positions.
Which metals stocks do you like?
At this point, I'm only recommending two gold stocks: Newmont Mining and Barrick Gold are ranked buy. And I do have a buy on U.S. Steel. But I'm neutral on virtually everything else.
完整模式：Mining for Metals
On the other hand...
here comes another point of view
$600 GOLD: WE HAVE ONLY JUST BEGUN
by Emanuel Balarie
April 13, 2006
http://financialsense.com/fsu/editorials/2006/0413.html
here comes another point of view
$600 GOLD: WE HAVE ONLY JUST BEGUN
by Emanuel Balarie
April 13, 2006
http://financialsense.com/fsu/editorials/2006/0413.html
it's amazing how both of them argue from a fundemental perspective, but came up with two very different opinions..
wut do u guys think??
wut do u guys think??
http://www.technicalindicators.com/gold.htm
Note: U.S. Markets closed for holiday on Friday, April 14
TECHNICAL FORECAST: Short term indicators continue mostly positive as gold remains near 25 year highs.
Gold Summary: Gold began the day higher, reaching the day's high of $604 in the morning but fell back a bit to settle at $601.30, still near the highest price since 1981. Click for a chart of June Gold (scroll beneath the chart for a computerized technical analysis). (Click here for 24 hour spot price (in the upper right part of the page) (Click here for futures quote)
A significant change is occurring in the gold market now with the recent increase in the number of long speculators coming into the market. The number of long speculators increased by 20,000 in the latest reporting week (ended April 4), a total increase of 45,000 in the past 3 weeks, a much higher than usual increase.
There is a potential for a lot more speculators to come into the market to help the price - when the gold market was rising in October (6 months ago) the number of long speculative contracts reached 292,000 - as of the latest report (April 4) the number was near 244,000, indicating that there is still plenty of room for more buyers before they reach levels they have in the recent past.
The present uptrend on the price chart is very positive. The price has aggressively risen in the past 6 months to levels not seen in a generation. Higher volume has come into the market in the past week - high volume often (although not always) accompanies a change in trend - in this case a potential change to a climactic upside move.
The short term indicators are now positive. The higher volume and large number of speculators are suggesting lots of volatility ahead, probably more on the upside, although there is likely to be volatility in both directions.
There are some similarities in the gold market to 1979 and 1980 when gold soared to around $850 an ounce. Now, as then, the oil price rose to levels not seen before. There was a growing threat of conflict with Iran as there is now. Now, as then, U.S. interest rates are rising. The prices of platinum and silver were rising with the gold. One major difference however is the value of the U.S. Dollar which has not dropped sharply as it did then (see dollar remarks below).
The activity in the gold market in the past 2 months mostly coincided with the activity in the Crude Oil market - MAY Crude Oil closed today (Wednesday) at $68.62 from $68.98 yesterday, near the all time record high hit in August (2005) around $70.
********************************************************
The Crude Oil market is near the highest point in 2 months and now getting closer to its all time high of near $70. If gold continues to be influenced by the Crude Oil price as it has in the past few months, this is potentially bullish for the gold.
*********************************************************
Based on latest available figures the demand for physical gold has not risen much (scroll down this link for more fundamentals on gold - the actual demand figures are those shown on the "tonnes" chart). Supply figures (available on the same link) show close to a 15% increase over last year, much larger than the increase in the demand figures.
Because of the high volatility gold traders may want to consider the use of gold options. A good place to get futures and options prices is at the New York Mercantile Exchange, the largest and most significant market for gold futures trading. (Click on the gold link in the lower right part of the page, then follow the pages to the "options" link - you can click on the "call" or "put" options - don't forget to change the month at the top of the page - April is now the most active but other months are also available.)
The JUNE U.S. Dollar Index rose a little today (Wednesday) to 89.31 from 89.15 yesterday, still below November's high of 92.53. The Dollar Index rose from last year's low of 81, but still a long way from its high around 120 four years ago. (Click here for more info about the U.S. Dollar Index and click on the "U.S. Dollar Index" in the right column. Click here for a longer term chart of the Dollar.)
Long speculators outnumber the shorts by almost three to one, 71% to 21% (as of April 4). (Click for actual figures for the years: 2002-6 2001 2000 1999.)
The JUNE Canadian Dollar contract closed today (Wednesday) at 87.30 from 87.53 yesterday.
The JUNE Australian Dollar contract closed today (Wednesday) at 73.13 from 73.28 yesterday..
(Most of the remarks below are repeated from previous issues):
The demand for physical gold decreased in the year 2005, while the supply increased by 10% (to access the actual supply and demand figures in tonnes, scroll to near the bottom of the demand page to "Supply and Demand (Tonnes)" - Be careful to look at the table which gives number of tonnes, not Dollars.) Demand for gold was helped by the bull market in stocks during the 1990's when there was more money to buy jewelry. For example, global demand for gold jewelry was over 3,700 metric tonnes in 1996 compared to only 2,736 in the year 2005.
The demand for physical gold and gold coins has not soared as it did in 1979-1980 period in which the gold reached $850 an ounce, although it is still possible there may be improvement in the demand for physical gold in the future, but so far the demand has not changed significantly.
A very fundamental issue is whether the gold can continue to rise when supply is up and demand is down and remains at relatively low levels compared to the demand during the 1990's (click for latest supply and demand figures).
The gold certainly has enough of the "traditional" positive reasons going for it now. There are some comparisons to 1979-1980, when the gold almost tripled in price in just few months - like now, Crude Oil prices were rising, and the Middle East situation was deteriorating, some hostages being held in Iran more than a year. So far however demand for physical gold has not increased as it did then.
There are other reasons for gold to rise, including growing trade deficits, uncertainty in economic, political, international affairs and many other reasons. The biggest factor however, overcoming practically all others, is that demand for gold remains static at levels lower than a few years ago. The last real gold boom in 1979-1980 came when the demand for physical gold was soaring. Although that could change, demand for physical gold is so far lagging behind the futures.
(Most of the remarks below are repeated:)
To put the recent rise in context of what the gold has been doing, click here for a look at the10 year monthly chart: Gold Price Chart or a 34 year chart at: Gold -Eagle.com. Click here for the gold price chart since 1971 in several different currencies.
The number of contracts in the gold futures market grew to record numbers, not seen since gold began trading in the New York Comex in 1975, and stayed there for all of the past year as many funds and other speculators stayed in the market longer than they have during ordinary rallies.
Recent differences with countries with whom close economic cooperation is necessary has cast uncertainty on future trade activity and its affect on the value of the dollar. This type of uncertainty is not too much unlike what occurred in the late 1970's, although with one major difference, interest rates, had then soared as high as 15% for long term Treasury Obligations. In spite of that, the U.S. Dollar continued to fall and it was not until 1980 when a new administration was evident that things turned around.
Confidence in the future stability is a principal factor determining the value of the Dollar and with it, the gold price. With uncertain relations with previously strong allies whose trade and cooperation is needed to maintain the stability of the Dollar, the strength of the Dollar cannot be relied on, particularly since it is in a downtrend which began 3 years ago. The future is unpredictable and uncertain.
The precious metals futures markets have reacted along with the U.S. Dollar, beginning to rise as the Dollar declines, a situation similar to the late 1970's. So far the reaction is minor compared to the runaway we saw in 1979-1980, but an acceleration is possible, particularly if gold can surpass previous resistance at the $420 - $430 area (these figures refer to when this was written, about the beginning of 2004, over a year ago).
Some physical gold fundamentals:
For the latest available supply and demand figures for physical gold, the World Gold Council has published actual figures for the past several years.
Supply remains at such high levels that 15 European countries had to agree to withhold their surplus gold from the market, selling it in smaller quantities and over a longer of period of time in order not to flood the market (see below for more detail).
When the gold price did in fact break out and soared in 1979-1980, there was actually a demand for physical gold and a rise in price was justified. There were often long lines at gold dealers as many people rushed to buy Krugerrands and other gold investments. Nothing like that is happening now as so far the demand is mostly confined to the futures market.
As an indication of the public's interest in gold now, following are the figures published by the U.S. Mint showing the amount of gold sold by the U.S. Mint in the form of "American Eagle" coins bullion sales (in no. of ounces):
No. of Ounces
1997 771,250
1998 1,839,500
1999 2,055,500
2000 164,500
2001 325,000
2002 315,000
2003 484,500
2004 893,000
2005 449,000
Judging from these figures, it appears there is no rush to buy gold coins in the U.S. - in fact it appears that more gold coins were sold when the stock market was rising, not falling as it has been lately. This helps to make the point that more gold is bought during good economic times when people have more money to buy gold, not during slow times when people have less money to spend.
The amount of known surplus gold held by central banks and institutions throughout the world is in excess of 32,000 metric tons, enough to supply world gold demand for almost a decade. The amount held by signatories to the "Washington Agreement" alone, countries which are planning to sell much of their gold, is over 15,000 tons.
This further points out the excess supply of gold on the market. In an effort to maintain the value of their gold reserves,various European countries agreed to withhold gold from the market so as not to drive the price down. The fact the gold market needs this artificial support rather than rely on free market supply and demand factors should say something about the future of the gold price. What would have happened to the price if these countries just sold their gold when they wanted to instead of agreeing to withhold it from the market?
There doesn't seem any reason that anyone can worry about a shortage of gold now or in the foreseeable future.
Industry Hedging:
There has been a lot of talk about some mining companies planning not to hedge as much as they have in the past. Of course there have always been some companies who don't hedge believing in the long run that prices will average out. However, if mining companies have cutback on their hedges, it is contradicted by the present position of industry hedgers.
The futures market exists for the benefit of miners to take advantage of high prices when they occur in the futures market. A miner can lock in a good profit in the futures market when prices are right.
If a mining company passes up the opportunity to lock up a good profit, he will then be speculating instead. Sometimes he will be right and other times he will be wrong. The subject of hedging has been discussed for centuries and there are many different attitudes toward it. However, most businessmen agree that if you can lock up a profit rather than speculate, you should do so.
Those miners who decide to speculate rather than hedge at a profit put their companies at risk if the price goes the wrong way. For an ongoing business not to hedge in a good profit, would be considered irresponsible or just plain greedy by some. Solid, long lasting companies are usually not based on speculation.
So far, in spite of reports of hedging cutbacks, we are unable to see hardly any change in the high levels at which the gold industry has recently hedged.
Further, the failure to hedge does not remove any physical gold from the market. The gold still comes to market so it has no affect on the physical market. So far it seems the only affect it has is to encourage some speculators to think it might give the gold price a boost.
As always, when the price rises, bullish sentiment does as well. However, the willingness of the industry to hedge at the relatively high numbers at which they are hedged now is certainly suggesting the industry is not as bullish as it might be. Once a gold producer has hedged he has locked in the price at which he can sell it, leaving no room on the upside.
This is not what we would expect to see if the physical gold market was improving. The industry attitude toward the present strength in the gold market, judging from action (in the futures market) rather than words, seems to be at the minimum, cautious (if not outright bearish) because the industry has sold so many contracts.
************
What influences the gold price?:
A constant issue in the gold market is what influences the price. Most people logically believe the supply and demand figures in the physical gold market will determine the price.
However, the futures market in New York is the single largest place in the world where more gold contracts are traded than any other. The price at which the physical gold changes hands, in almost all cases, depends on the price at the New York exchange. Practically all gold bullion and gold coin dealers will base the price of their transactions on this price.
Therefore, the supply and demand at the NY exchange is probably the single most important factor (at least in the short term) in determining the outlook for the gold price. We can see large changes in the supply or demand in the physical market, but if the price does not first change at the exchange it is not likely to change the price of the physical gold.
Of course, in the longer term, supply and demand in the physical market will cause the futures market to change accordingly, but significant and sustained changes in the physical gold market are few and far between.
************
Note: U.S. Markets closed for holiday on Friday, April 14
TECHNICAL FORECAST: Short term indicators continue mostly positive as gold remains near 25 year highs.
Gold Summary: Gold began the day higher, reaching the day's high of $604 in the morning but fell back a bit to settle at $601.30, still near the highest price since 1981. Click for a chart of June Gold (scroll beneath the chart for a computerized technical analysis). (Click here for 24 hour spot price (in the upper right part of the page) (Click here for futures quote)
A significant change is occurring in the gold market now with the recent increase in the number of long speculators coming into the market. The number of long speculators increased by 20,000 in the latest reporting week (ended April 4), a total increase of 45,000 in the past 3 weeks, a much higher than usual increase.
There is a potential for a lot more speculators to come into the market to help the price - when the gold market was rising in October (6 months ago) the number of long speculative contracts reached 292,000 - as of the latest report (April 4) the number was near 244,000, indicating that there is still plenty of room for more buyers before they reach levels they have in the recent past.
The present uptrend on the price chart is very positive. The price has aggressively risen in the past 6 months to levels not seen in a generation. Higher volume has come into the market in the past week - high volume often (although not always) accompanies a change in trend - in this case a potential change to a climactic upside move.
The short term indicators are now positive. The higher volume and large number of speculators are suggesting lots of volatility ahead, probably more on the upside, although there is likely to be volatility in both directions.
There are some similarities in the gold market to 1979 and 1980 when gold soared to around $850 an ounce. Now, as then, the oil price rose to levels not seen before. There was a growing threat of conflict with Iran as there is now. Now, as then, U.S. interest rates are rising. The prices of platinum and silver were rising with the gold. One major difference however is the value of the U.S. Dollar which has not dropped sharply as it did then (see dollar remarks below).
The activity in the gold market in the past 2 months mostly coincided with the activity in the Crude Oil market - MAY Crude Oil closed today (Wednesday) at $68.62 from $68.98 yesterday, near the all time record high hit in August (2005) around $70.
********************************************************
The Crude Oil market is near the highest point in 2 months and now getting closer to its all time high of near $70. If gold continues to be influenced by the Crude Oil price as it has in the past few months, this is potentially bullish for the gold.
*********************************************************
Based on latest available figures the demand for physical gold has not risen much (scroll down this link for more fundamentals on gold - the actual demand figures are those shown on the "tonnes" chart). Supply figures (available on the same link) show close to a 15% increase over last year, much larger than the increase in the demand figures.
Because of the high volatility gold traders may want to consider the use of gold options. A good place to get futures and options prices is at the New York Mercantile Exchange, the largest and most significant market for gold futures trading. (Click on the gold link in the lower right part of the page, then follow the pages to the "options" link - you can click on the "call" or "put" options - don't forget to change the month at the top of the page - April is now the most active but other months are also available.)
The JUNE U.S. Dollar Index rose a little today (Wednesday) to 89.31 from 89.15 yesterday, still below November's high of 92.53. The Dollar Index rose from last year's low of 81, but still a long way from its high around 120 four years ago. (Click here for more info about the U.S. Dollar Index and click on the "U.S. Dollar Index" in the right column. Click here for a longer term chart of the Dollar.)
Long speculators outnumber the shorts by almost three to one, 71% to 21% (as of April 4). (Click for actual figures for the years: 2002-6 2001 2000 1999.)
The JUNE Canadian Dollar contract closed today (Wednesday) at 87.30 from 87.53 yesterday.
The JUNE Australian Dollar contract closed today (Wednesday) at 73.13 from 73.28 yesterday..
(Most of the remarks below are repeated from previous issues):
The demand for physical gold decreased in the year 2005, while the supply increased by 10% (to access the actual supply and demand figures in tonnes, scroll to near the bottom of the demand page to "Supply and Demand (Tonnes)" - Be careful to look at the table which gives number of tonnes, not Dollars.) Demand for gold was helped by the bull market in stocks during the 1990's when there was more money to buy jewelry. For example, global demand for gold jewelry was over 3,700 metric tonnes in 1996 compared to only 2,736 in the year 2005.
The demand for physical gold and gold coins has not soared as it did in 1979-1980 period in which the gold reached $850 an ounce, although it is still possible there may be improvement in the demand for physical gold in the future, but so far the demand has not changed significantly.
A very fundamental issue is whether the gold can continue to rise when supply is up and demand is down and remains at relatively low levels compared to the demand during the 1990's (click for latest supply and demand figures).
The gold certainly has enough of the "traditional" positive reasons going for it now. There are some comparisons to 1979-1980, when the gold almost tripled in price in just few months - like now, Crude Oil prices were rising, and the Middle East situation was deteriorating, some hostages being held in Iran more than a year. So far however demand for physical gold has not increased as it did then.
There are other reasons for gold to rise, including growing trade deficits, uncertainty in economic, political, international affairs and many other reasons. The biggest factor however, overcoming practically all others, is that demand for gold remains static at levels lower than a few years ago. The last real gold boom in 1979-1980 came when the demand for physical gold was soaring. Although that could change, demand for physical gold is so far lagging behind the futures.
(Most of the remarks below are repeated:)
To put the recent rise in context of what the gold has been doing, click here for a look at the10 year monthly chart: Gold Price Chart or a 34 year chart at: Gold -Eagle.com. Click here for the gold price chart since 1971 in several different currencies.
The number of contracts in the gold futures market grew to record numbers, not seen since gold began trading in the New York Comex in 1975, and stayed there for all of the past year as many funds and other speculators stayed in the market longer than they have during ordinary rallies.
Recent differences with countries with whom close economic cooperation is necessary has cast uncertainty on future trade activity and its affect on the value of the dollar. This type of uncertainty is not too much unlike what occurred in the late 1970's, although with one major difference, interest rates, had then soared as high as 15% for long term Treasury Obligations. In spite of that, the U.S. Dollar continued to fall and it was not until 1980 when a new administration was evident that things turned around.
Confidence in the future stability is a principal factor determining the value of the Dollar and with it, the gold price. With uncertain relations with previously strong allies whose trade and cooperation is needed to maintain the stability of the Dollar, the strength of the Dollar cannot be relied on, particularly since it is in a downtrend which began 3 years ago. The future is unpredictable and uncertain.
The precious metals futures markets have reacted along with the U.S. Dollar, beginning to rise as the Dollar declines, a situation similar to the late 1970's. So far the reaction is minor compared to the runaway we saw in 1979-1980, but an acceleration is possible, particularly if gold can surpass previous resistance at the $420 - $430 area (these figures refer to when this was written, about the beginning of 2004, over a year ago).
Some physical gold fundamentals:
For the latest available supply and demand figures for physical gold, the World Gold Council has published actual figures for the past several years.
Supply remains at such high levels that 15 European countries had to agree to withhold their surplus gold from the market, selling it in smaller quantities and over a longer of period of time in order not to flood the market (see below for more detail).
When the gold price did in fact break out and soared in 1979-1980, there was actually a demand for physical gold and a rise in price was justified. There were often long lines at gold dealers as many people rushed to buy Krugerrands and other gold investments. Nothing like that is happening now as so far the demand is mostly confined to the futures market.
As an indication of the public's interest in gold now, following are the figures published by the U.S. Mint showing the amount of gold sold by the U.S. Mint in the form of "American Eagle" coins bullion sales (in no. of ounces):
No. of Ounces
1997 771,250
1998 1,839,500
1999 2,055,500
2000 164,500
2001 325,000
2002 315,000
2003 484,500
2004 893,000
2005 449,000
Judging from these figures, it appears there is no rush to buy gold coins in the U.S. - in fact it appears that more gold coins were sold when the stock market was rising, not falling as it has been lately. This helps to make the point that more gold is bought during good economic times when people have more money to buy gold, not during slow times when people have less money to spend.
The amount of known surplus gold held by central banks and institutions throughout the world is in excess of 32,000 metric tons, enough to supply world gold demand for almost a decade. The amount held by signatories to the "Washington Agreement" alone, countries which are planning to sell much of their gold, is over 15,000 tons.
This further points out the excess supply of gold on the market. In an effort to maintain the value of their gold reserves,various European countries agreed to withhold gold from the market so as not to drive the price down. The fact the gold market needs this artificial support rather than rely on free market supply and demand factors should say something about the future of the gold price. What would have happened to the price if these countries just sold their gold when they wanted to instead of agreeing to withhold it from the market?
There doesn't seem any reason that anyone can worry about a shortage of gold now or in the foreseeable future.
Industry Hedging:
There has been a lot of talk about some mining companies planning not to hedge as much as they have in the past. Of course there have always been some companies who don't hedge believing in the long run that prices will average out. However, if mining companies have cutback on their hedges, it is contradicted by the present position of industry hedgers.
The futures market exists for the benefit of miners to take advantage of high prices when they occur in the futures market. A miner can lock in a good profit in the futures market when prices are right.
If a mining company passes up the opportunity to lock up a good profit, he will then be speculating instead. Sometimes he will be right and other times he will be wrong. The subject of hedging has been discussed for centuries and there are many different attitudes toward it. However, most businessmen agree that if you can lock up a profit rather than speculate, you should do so.
Those miners who decide to speculate rather than hedge at a profit put their companies at risk if the price goes the wrong way. For an ongoing business not to hedge in a good profit, would be considered irresponsible or just plain greedy by some. Solid, long lasting companies are usually not based on speculation.
So far, in spite of reports of hedging cutbacks, we are unable to see hardly any change in the high levels at which the gold industry has recently hedged.
Further, the failure to hedge does not remove any physical gold from the market. The gold still comes to market so it has no affect on the physical market. So far it seems the only affect it has is to encourage some speculators to think it might give the gold price a boost.
As always, when the price rises, bullish sentiment does as well. However, the willingness of the industry to hedge at the relatively high numbers at which they are hedged now is certainly suggesting the industry is not as bullish as it might be. Once a gold producer has hedged he has locked in the price at which he can sell it, leaving no room on the upside.
This is not what we would expect to see if the physical gold market was improving. The industry attitude toward the present strength in the gold market, judging from action (in the futures market) rather than words, seems to be at the minimum, cautious (if not outright bearish) because the industry has sold so many contracts.
************
What influences the gold price?:
A constant issue in the gold market is what influences the price. Most people logically believe the supply and demand figures in the physical gold market will determine the price.
However, the futures market in New York is the single largest place in the world where more gold contracts are traded than any other. The price at which the physical gold changes hands, in almost all cases, depends on the price at the New York exchange. Practically all gold bullion and gold coin dealers will base the price of their transactions on this price.
Therefore, the supply and demand at the NY exchange is probably the single most important factor (at least in the short term) in determining the outlook for the gold price. We can see large changes in the supply or demand in the physical market, but if the price does not first change at the exchange it is not likely to change the price of the physical gold.
Of course, in the longer term, supply and demand in the physical market will cause the futures market to change accordingly, but significant and sustained changes in the physical gold market are few and far between.
************
This is the first time I read the articles about metals and gold.
Though,I dont quite understand, but at leastl I 've a brief idea .
Thank you.
Though,I dont quite understand, but at leastl I 've a brief idea .
Thank you.
maytay
you're very welcome
I noticed all business article uses very similar vocabularies... so as you read more + get all the hard words figured out, it will start to make sense soon!!
you're very welcome
I noticed all business article uses very similar vocabularies... so as you read more + get all the hard words figured out, it will start to make sense soon!!
thanks bear. you are the angel.
*shy* #^__^#
pig u wake up so early !!
pig u wake up so early !!
just a friendly reminder
silver is now in the state of overbrought... so be careful out there
silver is now in the state of overbrought... so be careful out there
Rogers: Gold prices will reach $1,000
14:51:26 GMT, 19 April, 2006
The man who predicted the current commodities rally towards the end of the last century is reported as saying that the price of gold may not stop rising until it tops $1,000 an ounce.
In an interview with Bloomberg, Jim Rogers, the 'celebrity' investor and commodities guru, stated that raw material and energy prices were such that it would continue to drive up the metals markets of gold, silver, copper and platinum.
"The shortest bull market for commodities lasted 15 years, the longest 23 years," Mr Rogers told a Bloomberg interviewer. The current boom has been going for less than five.
Mr Rogers gave investors further reason to look at commodities investments for long-term security.
"Supply and demand is terribly out of balance for nearly all commodities right now," the former George Soros partner maintained, before claiming: "This is not a bubble."
Jim Rogers' comments come in the same month that Paul Walker, the chief executive of gold market researchers GFMS, forecasted gold prices breaking the early 1980s record of $850 an ounce.
With such strong support from respected business figures, the market has the potential for renewed vigour and a further boom towards the next milestone for gold prices at $700 an ounce.
©Adfero Limited
14:51:26 GMT, 19 April, 2006
The man who predicted the current commodities rally towards the end of the last century is reported as saying that the price of gold may not stop rising until it tops $1,000 an ounce.
In an interview with Bloomberg, Jim Rogers, the 'celebrity' investor and commodities guru, stated that raw material and energy prices were such that it would continue to drive up the metals markets of gold, silver, copper and platinum.
"The shortest bull market for commodities lasted 15 years, the longest 23 years," Mr Rogers told a Bloomberg interviewer. The current boom has been going for less than five.
Mr Rogers gave investors further reason to look at commodities investments for long-term security.
"Supply and demand is terribly out of balance for nearly all commodities right now," the former George Soros partner maintained, before claiming: "This is not a bubble."
Jim Rogers' comments come in the same month that Paul Walker, the chief executive of gold market researchers GFMS, forecasted gold prices breaking the early 1980s record of $850 an ounce.
With such strong support from respected business figures, the market has the potential for renewed vigour and a further boom towards the next milestone for gold prices at $700 an ounce.
©Adfero Limited
http://www.leg2capital.com/audio/turk_audio.html
James Turk
James gives us his current thoughts on the precious metals,
and explains his prediction that gold will reach US$8,000/oz.
Main points
- Huge US government deficit
- Housing bubbles
- Middle East problems: Iran problem is even more complicated than Iraq problem because of Iran-China-Russian's buddy-buddy relationship
- The main risk we're facing today is not fluctuation in gold prices, but a collapse in US dollars.
James Turk
James gives us his current thoughts on the precious metals,
and explains his prediction that gold will reach US$8,000/oz.
Main points
- Huge US government deficit
- Housing bubbles
- Middle East problems: Iran problem is even more complicated than Iraq problem because of Iran-China-Russian's buddy-buddy relationship
- The main risk we're facing today is not fluctuation in gold prices, but a collapse in US dollars.
引用框(hunniebearu @ 04-21 2006, 10:21)
http://www.leg2capital.com/audio/turk_audio.html
James Turk
James gives us his current thoughts on the precious metals,
and explains his prediction that gold will reach US$8,000/oz.
Main points
- Huge US government deficit
- Housing bubbles
- Middle East problems: Iran problem is even more complicated than Iraq problem because of Iran-China-Russian's buddy-buddy relationship
- The main risk we're facing today is not fluctuation in gold prices, but a collapse in US dollars.
James Turk
James gives us his current thoughts on the precious metals,
and explains his prediction that gold will reach US$8,000/oz.
Main points
- Huge US government deficit
- Housing bubbles
- Middle East problems: Iran problem is even more complicated than Iraq problem because of Iran-China-Russian's buddy-buddy relationship
- The main risk we're facing today is not fluctuation in gold prices, but a collapse in US dollars.
It's quite a point of view from this Mr. James Turk, but US $8000 per ounce?!...I don't know if I can live to see this kind of price unless a collapse in US dollars just happens like a flash. I am not saying it's not possible, but before the price of gold reaches $8000...I guess we will all see necklaces, rings...made of copper or rion at the Tiffany or Cartier shops. Ha ha ha... First time in my life I got the feeling that my teeny-tiny wedding ring is very precious (Just kiddding, it is precious!)...
haha.. I agree $8000/oz is very much on the high end of estimation 
... went research a bit on his background...
he's the founder of globemoney.com, so he's basically making money out of dealing bullions. Therefore it won't be a surprise when he's opinions are biased.
nevertheless, some of his opinions and views are quite valid and worth taking into consideration ^ ^
... went research a bit on his background... he's the founder of globemoney.com, so he's basically making money out of dealing bullions. Therefore it won't be a surprise when he's opinions are biased.
nevertheless, some of his opinions and views are quite valid and worth taking into consideration ^ ^
Well, this news can also link to the Asia news.....
Alumina joins $2bn Vietnam push
By Barry Fitzgerald
April 26, 2006
ALCOA and the Melbourne-based Alumina have signed up with the Vietnamese Government to investigate the $2 billion-plus development of an integrated bauxite-alumina project in the central highland province of Dak Nong.
Should the Anzac Day accord proceed as planned, Alumina's involvement — through its 40 per cent share of the Alcoa-managed AWAC global alumina alliance — would represent the biggest direct investment in Vietnam by an Australian company.
BHP Billiton was a trailblazer for the Australian resources industry into Vietnam with its 1993 victory in securing development rights to the Dai Hung oilfield. But that proved to be a victory BHP wished it had never had, with the company later walking away at a cost of $260 million when Dai Hung proved to be on the small side.
BHP remains active in Vietnam and last year secured exploration licences for bauxite as a possible precursor to it also building a $2 billion-plus bauxite-alumina project, also in Dak Nong.
AWAC's Dak Nong project is one of many that it has under consideration around the world, including a $1.5 billion expansion of the Wagerup refinery in Western Australia. Government approval for the environmentally controversial Wagerup project is pending.
But as AWAC's growing list of alternative projects around the world indicates, AWAC is not reliant on its WA operations for growth.
Dak Nong bauxite is said to be among the highest quality in the world. Vietnam has the added attraction for potential new developments of low labour rates and the availability of hydro-electric power, with the latter increasingly important to aluminium producers because of the increasing use of carbon tax penalties in developed countries as a means to curb greenhouse gas emissions.
AWAC's deal is with Vietnam National Coal-Minerals Industries Group(Vinacomin). It calls for the creation of a joint venture to explore the feasibility of a bauxite-alumina refinery project based on the Gia Nghia bauxite deposit area in Dak Nong.
First-stage alumina capacity has been estimated at 1-1.5 million tonnes a year, with expansion potential.
(It takes four tonnes of bauxite to make two tonnes of alumina, which is enough to make one tonne of aluminium, from which 60,000 beverage cans could be made).
While Vietnam is happy to introduce foreign equity and technology to develop an alumina industry, it will keep outright control, with Vinacomin holding 51 per cent and AWAC holding the other 49 per cent.
Vinacomin is responsible for all bauxite development in Vietnam and was recently formed as a result of the merger of the Vietnam National Coal Group and the Vietnam National Minerals Corporation.
In a recent briefing to investors, Alumina said that with strong global aluminium demand continuing, the outlook for the alumina market was favourable.
It said that high caustic soda, energy and raw material costs were a worry for the industry. But with its growth projects under way, AWAC was adding lower cost production to its portfolio. From 2009, AWAC will have increased its annual capacity by about 3.2 million tonnes of alumina.
Alumina joins $2bn Vietnam push
By Barry Fitzgerald
April 26, 2006
ALCOA and the Melbourne-based Alumina have signed up with the Vietnamese Government to investigate the $2 billion-plus development of an integrated bauxite-alumina project in the central highland province of Dak Nong.
Should the Anzac Day accord proceed as planned, Alumina's involvement — through its 40 per cent share of the Alcoa-managed AWAC global alumina alliance — would represent the biggest direct investment in Vietnam by an Australian company.
BHP Billiton was a trailblazer for the Australian resources industry into Vietnam with its 1993 victory in securing development rights to the Dai Hung oilfield. But that proved to be a victory BHP wished it had never had, with the company later walking away at a cost of $260 million when Dai Hung proved to be on the small side.
BHP remains active in Vietnam and last year secured exploration licences for bauxite as a possible precursor to it also building a $2 billion-plus bauxite-alumina project, also in Dak Nong.
AWAC's Dak Nong project is one of many that it has under consideration around the world, including a $1.5 billion expansion of the Wagerup refinery in Western Australia. Government approval for the environmentally controversial Wagerup project is pending.
But as AWAC's growing list of alternative projects around the world indicates, AWAC is not reliant on its WA operations for growth.
Dak Nong bauxite is said to be among the highest quality in the world. Vietnam has the added attraction for potential new developments of low labour rates and the availability of hydro-electric power, with the latter increasingly important to aluminium producers because of the increasing use of carbon tax penalties in developed countries as a means to curb greenhouse gas emissions.
AWAC's deal is with Vietnam National Coal-Minerals Industries Group(Vinacomin). It calls for the creation of a joint venture to explore the feasibility of a bauxite-alumina refinery project based on the Gia Nghia bauxite deposit area in Dak Nong.
First-stage alumina capacity has been estimated at 1-1.5 million tonnes a year, with expansion potential.
(It takes four tonnes of bauxite to make two tonnes of alumina, which is enough to make one tonne of aluminium, from which 60,000 beverage cans could be made).
While Vietnam is happy to introduce foreign equity and technology to develop an alumina industry, it will keep outright control, with Vinacomin holding 51 per cent and AWAC holding the other 49 per cent.
Vinacomin is responsible for all bauxite development in Vietnam and was recently formed as a result of the merger of the Vietnam National Coal Group and the Vietnam National Minerals Corporation.
In a recent briefing to investors, Alumina said that with strong global aluminium demand continuing, the outlook for the alumina market was favourable.
It said that high caustic soda, energy and raw material costs were a worry for the industry. But with its growth projects under way, AWAC was adding lower cost production to its portfolio. From 2009, AWAC will have increased its annual capacity by about 3.2 million tonnes of alumina.
SEASONS OF GOLD
by Doug Casey
http://financialsense.com/editorials/casey/2006/0428.html
If there was one misstep you could make at this point, it would be to get scared off by the inevitable volatility and step aside until it gets "safe" to come back in. Too often that results in missing major up-moves. Trying to pick the tops or bottoms of any market is a fool's game.
A final thought: This market trend is solidly in motion. While it may periodically scare you as much as it thrills you, at no point doubt that it is your friend. Treat it accordingly and it will treat you well. In fact, even better than you likely imagine.
by Doug Casey
http://financialsense.com/editorials/casey/2006/0428.html
If there was one misstep you could make at this point, it would be to get scared off by the inevitable volatility and step aside until it gets "safe" to come back in. Too often that results in missing major up-moves. Trying to pick the tops or bottoms of any market is a fool's game.
A final thought: This market trend is solidly in motion. While it may periodically scare you as much as it thrills you, at no point doubt that it is your friend. Treat it accordingly and it will treat you well. In fact, even better than you likely imagine.
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