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Gold, Discussion
nipper
post Posted: Jun 24 2019, 12:14 PM
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I've been looking at how I can successfully get gold exposure.
The obvious path ....seeing ways are to either 1) find a company, or 2) buy an ETF. I tend to think #1 has its pitfalls (both figuratively and literally) and #2 includes dross.

With the ETF, the lazy way, it can either be relating to the Gold price - the usual route via GOLD or similar - or into a company based fund. Seeing active management doesn't seem to add too much, and there is the additional currency challenge, I've drilled down to an ASX listed US$ denominated global ETF, the Vaneck Gold Miners CDI 1:1 ASX:GDX
QUOTE
The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the NYSE Arca Gold Miners Index.

The fund normally invests at least 80% of its total assets in securities that comprise the Gold Miners Index. The Gold Miners Index is a modified market-capitalization weighted index primarily comprised of publicly traded companies involved in the mining for gold and silver. The fund is non-diversified.

As at Dec 2018, GDX is 91% in gold, 9% in Silver by way of its company exposures.

.... and country exposure based on the Stock Exchange domicile is as follows:
50% Canada*
17% Australia
14% USA
6% South Africa
3% Peru
... and the rest spread London, HK and a few randoms
* while Canada is the exchange home, a large number of the listings appear to be US operations. Not sure why.

Even paid a US$0.105 dividend in December last year
Disappointingly, (for listing longevity) the market cap appears to be only around $100mill, but that is the AU part of what I think is a much larger play



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jun 20 2019, 04:20 PM
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In Reply To: mullokintyre's post @ Jun 18 2019, 03:36 PM

QUOTE
This year gold has past thru 1800 mark which we had only seen twice before in 2011 and 2016.
Gold sitting on 1950, and smoothly approaching the 2000 mark.

Well, it broke into that 2k territory today. 2004 as I type.
The AUD has increased against the greenback, tempering some of the gains. But gold is rising regardless of the currency it is measured in.
Always a nice place to be.

But it won't last long according to the experts.
FROM ABC NEWS

QUOTE
Renewed hope for another Australian gold rush might be good for those who happen to strike it rich — but investors say it is also a sign of global uncertainty.

Key points:
Australia exported the most gold in its history last year
Demand is believed to be driven by global uncertainty
Central banks bought more gold last year than they have since the 1970s
The latest ABS data shows mining companies are spending more than ever looking for the rare commodity across Australia, with almost half a billion dollars spent between October and March.

Last year, Australia also exported the most gold in its history at 317 tonnes, maintaining its status as the second biggest producer of the element.

Western Australia's goldfields are leading the charge, however there has also been increased prospecting in the Northern Territory, where $14m was spent on gold exploration last quarter.

Warren Pearce, the chief executive of the Association of Mining and Exploration Companies, says exploration in both WA and the NT has "led to the recovery of the industry" back to 2012 levels.

"We have a lot of confidence that the future of the gold industry is very bright," he said.

What's behind this renewed confidence?
Mr Pearce said there is a simple reason — Australian gold prices have been steadily rising.

Today, they reached an all-time high of $2,000 an ounce.

But what is driving that might not be all rosy.

"It's perhaps an unfortunate positive that gold prices tend to rise when things aren't going well in the rest of the economy," Mr Pearce said.

That is because gold is typically seen as a safer option.

Truck emerges from underground gold mine.
PHOTO: Gold exploration is at a high in Western Australia. (ABC Goldfields-Esperance: Jarrod Lucas)
Unlike bonds or stocks, it is seen as a tangible commodity that will not lose its inherent value if markets crash.

Mr Pearce speculated that US-China tensions and even Brexit could be some sources of global uncertainty driving investors towards gold at the moment.

David Baker from Australian firm Baker Steele Capital — which runs a global gold fund — agrees there could be many sources of instability driving a push back to gold.

"I think there's a feeling that there's more risks in the world," Mr Baker says.

"There's more challenges. We're seeing trade wars and currency wars."

Central banks buying up gold
Last year, the world's central banks bought up 650 tonnes of gold, their highest amount since the 1970s.

"Central banks see gold as a hedge against uncertainty in the world," Mr Baker said.

Central Banks buying up in high numbers include Kazakhstan, Russia, Turkey, India and Poland.

"These countries are very dependent on the US dollar for trade and settling accounts," Mr Baker says.

"What they're seeing is the US is quick to put sanctions on countries, so the feeling is you have a bit more gold in the bank, so you're more independent from the US."

Yet, like many historical moves back towards gold, Mr Baker said it was not easy to pinpoint the exact logic driving investors.

He warned the industry not to get too excited by the renewed optimism of Australian gold hunters.

"Gold is a very rare commodity and it takes a lot of time and expertise to find it," he said.

"That's why it's a precious metal.

"Australians are doing all they can and being reasonably successful but it's not an easy game."

Industry analyst firm IBISWorld echoed these sentiments, and said a lack of new gold deposit discoveries in the past decade and several mines forecast to close by 2025 presented a challenge for the sector.

The firm forecasts Australia's production of gold will fall to 255 tonnes by 2023, pushing it down to be the world's fourth largest producer.

The Association of Mining and Exploration Companies' Mr Pearce said he expected new gold deposits to be discovered in the next 18 months as exploration progresses.


One assumes that if a number of gold mines do close, then the price goes up as supply decreases.


Obviously, if the price of gold goes up, three things may happen:

1.Gold deposits that were once considered uneconomic can become attractive.
2. Exploration for gold becomes more attractive.
3. Reprocessing leach heaps and old tailings becomes economical.

Mick





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sent from my Olivetti Typewriter.

Said 'Thanks' for this post: nipper  early birds  
 
mullokintyre
post Posted: Jun 20 2019, 02:02 PM
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In Reply To: nipper's post @ Jun 19 2019, 08:04 AM

It can be dissapointing (to put it mildly).
But not today.
EVN up 6%.
Sbm up 8%
RMS up 12%
SLR up 5%.
Even the silver dog SVL up 10%.
PRX only one not performing, only up 1%.
Good day for me.
Mick




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sent from my Olivetti Typewriter.

Said 'Thanks' for this post: nipper  
 
nipper
post Posted: Jun 19 2019, 08:04 AM
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How Great Does Gold Look

https://www.sharecafe.com.au/2019/06/14/how...does-gold-look/ ..... some interesting charts, and the usual story

- but how disappointing it can be, & difficult it is to find a successful miner



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
jacsar
post Posted: Jun 18 2019, 11:35 PM
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In Reply To: jacsar's post @ Jun 18 2019, 11:08 PM

... a good point of view..... actually the phrase I was looking for was a reasoned point of view

 
jacsar
post Posted: Jun 18 2019, 11:08 PM
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In Reply To: mullokintyre's post @ Jun 18 2019, 03:36 PM


Clive Maund always has a good point of view.... With things shaping up so well for gold, we can certainly take any short-term correction in our stride, and more than that, we can seize upon it as an opportunity to build positions further across the sector, whether by means of ETFs, stocks or options, and of course, gold itself.
http://news.goldseek.com/CliveMaund/1560775942.php ... cheers

 


mullokintyre
post Posted: Jun 18 2019, 03:36 PM
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This year gold has past thru 1800 mark which we had only seen twice before in 2011 and 2016.
Gold sitting on 1950, and smoothly approaching the 2000 mark.
The rallys in previous years lasted multiple years, so this one may have a little while to go.




Mick



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sent from my Olivetti Typewriter.

Said 'Thanks' for this post: nipper  
 
nipper
post Posted: Jun 5 2019, 01:22 PM
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No Bargains from Gold Mergers
QUOTE
Assets put on the market in the wake of this season’s big gold mergers won’t come cheap, according to PwC mining head Chris Dodd, as a new round of consolidation looms in the gold sector. PwC will release its annual survey of the state of the world’s big miners today, tipping a return to corporate action among the top 40 miners.

Against a backdrop of mega-mergers in the gold sector; Newmont Mining’s $US10 billion ($14.3bn) tie-up with Gold Corp, and Barrick’s $US6bn merger with Randgold, followed by an offer to reintegrate Acacia Mining, analysts have flagged billions of dollars worth of asset sales, as the newly married gold majors seek to clean out their houses.

Kalgoorlie’s Super Pit mine could be back on the market, along with gold and copper mines in Zambia, Chile and Tanzania. Australia’s leading lights in the gold sector; including Northern Star Resources and Evolution Mining, made their fortunes in the wake of the pullback of the US gold majors, picking up a slew of Australian assets deemed too small or too difficult to explain to offshore markets.

The sell-off allowed Australian miners to pick up gold mines at discounted prices, most of which have more than repaid their purchase price. But Mr Dodd said the majors would be under pressure to get a good price for their assets in a renewed round of sales, to reassure markets about the merits of the top-of-the-market transactions. “There’s a level of strength in that mid-tier, and quite a lot of money. They’ve actually been quite profitable over the last five years. So the buyers are relatively cashed-up,” he said.“And I think the sellers have a need for the sale number to be relatively significant to make a dent on the prices they paid ... which were pretty full value.”

But Mr Dodd said that bigger would not necessarily be better, warning that the recent spate of M&A was driven as much by major investors as a genuine need for growth. “We would continue to highlight that the value that comes out of gold mergers are the savings in other costs ; not much changes in the actual operations, so it means it’s relatively limited other than you’ve got control over a greater chunk of resource.” “The synergy is in how you can close another head office or other overheads, which is not that much money. “It’s not abundantly evident where the value is in those ­transactions.”

Mr Dodd said big sovereign wealth funds, and other major global investors, were helping push corporate activity in the gold space to give them investment-grade options on a bigger scale.

“Investors do seem to be keen on genuine pure-plays. People want to invest because they want exposure to gold. And you want to be able to do it at a scale that means you’re investing in gold and you shouldn’t be exposed to operational nuances,” he said. “That’s possibly what these (mergers) are doing, playing into what the market is asking for; your big sovereign funds and others want to take a defensive play in gold, and they want a big one.”

Although the buy-up of cheap unwanted assets from gold maj­ors earlier this decade delivered extraordinary gains for Australian miners, boomtime corporate activity in the sector was far less successful, and investors have been more than willing to punish companies seen to have overpaid for assets that disappoint.

Northern Star shares took a short-term hit in April after quarterly results from its Pogo mine in Alaska, bought for $US260 million last year, failed to live up to market expectations.

And St Barbara is now facing serious push-back on its proposed $768m acquisition of Canada’s Atlantic Gold, on fears the company has offered too much. An investor backlash yesterday, in the wake of a production downgrade on Monday, forced St Barbara to offer a get-out ­option to shareholders who had already put money into its $490m equity raising to fund the deal.

“You often don’t know you’re overpaying until later, but I don’t think any investor is going to thank people for pursuing ­acquisitions at all costs,” Mr Dodd said. "I think we will need to see the sort of discipline they’ve had in place until now ... if you go away from that you will be punished.”

https://www.theaustralian.com.au/business/m...4b85093f9846154



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: May 6 2019, 07:15 PM
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In Reply To: mullokintyre's post @ May 6 2019, 02:48 PM

saw a lot of small gold Co. went up as well. at least we see people start to do bit of hedging.

kinda amazing how people lost fears in market!! blink.gif



 
mullokintyre
post Posted: May 6 2019, 02:48 PM
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In Reply To: early birds's post @ May 6 2019, 09:07 AM

Well, Gold went up a bit, silver , platinum and palladium all went down.
Funnymentals don't matter any more eb.
Mick



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sent from my Olivetti Typewriter.
 
 


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