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Gold, Discussion
zac
post Posted: Aug 17 2019, 12:52 PM
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In Reply To: nipper's post @ Aug 17 2019, 12:16 PM



GOLD is having its days in the sun and imo will steadily rise for some time yet as world nervousness continues to escalate.

Interesting to see such marginal profit stocks as RMS rise so strongly.

Awaiting resource evaluation from GML soon and further high grade hits from next drilling round by CLZ.

I think the juniors are awakening.


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nipper
post Posted: Aug 17 2019, 12:16 PM
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In Reply To: PeterH's post @ Aug 17 2019, 11:40 AM

Most excellent response. ....so true about the reserves and the production cost issues
. (I've been adding GDX { having been burnt with Gwalia type disasters a while ago} )

- have to get away from the 'gold solely as insurance' thinking. The other reality is that people such as Gave play to the advice market; making decisions at the individual level allows for a lot more flexibility and nimbleness.



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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

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PeterH
post Posted: Aug 17 2019, 11:40 AM
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In Reply To: nipper's post @ Jul 20 2019, 11:34 AM

FWIW Nipper the way I see it is that we are facing a collapse of confidence in fiat currencies, what with Trump, the threat of competitive currency devaluation and the smartest guys in the room preparing us for massive bank collapses in Europe, and more. There is equal risk in holding cash or bonds which are really only a less accessible form of fiat currency. Accordingly my portfolio is now heavily laden with big gold producers with big reserves.
No point in buying gold as such. The cheapest way to invest in gold is while it is still in the ground. If you buy gold itself then all you have is the same amount of gold when it hits the fan. On the other hand, if you own reserves then the amount of gold you own effectively increases when the POG rises, but more than proportionately so, because reserves of lower grades become mineable. Most gold producers have large reserves of gold just below the economically mineable grade. Takes a little thinking to get around this one but it's worth the effort.

There is another thing I might as well mention while I am at it, and you probably know this Nipper as you are a smart guy, but many don't. To invest in gold calls for an understanding of it which most financial journalists do not have. Whenever you start reading an article on gold which begins with a rundown on the demand and supply of gold you should read no further. This is because the laws of supply and demand do not apply to gold and the journo clearly does not know this. There are several reasons why this is so, but I will just mention the most significant one. It is that effectively all the gold which has ever been mined is still in existence and is owned by people who value it.
The laws of supply and demand in economic theory were conceived in the first instance to apply only to commodities which are consumed and then are no more, thus requiring constant new supply which behaves according to changes in demand. Since gold remains in existence and is effectively indestructible and always available for sale at a price then the supply side which the journos refer to (freshly extracted gold) is irrelevant.

I will put this another way. The supply of any other commodity comprises only new and reclaimed production. The actual potential supply of gold to the market comprises all of the already mined gold in existence, which is available to the market at a price, plus current extraction which is infinitesimal and not even worth considering in the equation. Bear in mind that unlike most commodities, gold is hard to find and extract and supply cannot be ratcheted up in a hurry, if at all.

Our gold journos don't seem to cotton on to this peculiarity of the supply side of the equation and the vital fact that the POG has nothing to do with 'production' but everything to do with the psychology of the current holders of gold, be they individuals, traders, central banks or whatever, together with, of course, the psychology of the potential buyers. In a nutshell, the POG is affected only by the emotions of humans and we are very soon to enter very emotional times.
Sure this is a simplification but you have to start somewhere.


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nipper
post Posted: Aug 16 2019, 10:13 PM
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QUOTE
I[n these volatile times, i]s gold, then, a better hedge than bonds?

Gavekal Research co-founder Charles Gave, a veteran of financial markets, says his rule of thumb is to use gold to hedge his equity portfolio during inflationary periods, and long US bonds if the economy is in a "disinflationary interlude".

To work out whether inflation is the issue, Gave turns to the market. If bonds have outperformed gold over the past five years, he uses the fixed income market as his safe haven, and the same for gold. The ratio of total returns from Treasuries to gold turned negative in May, and this prompted Gave to recommend his clients switch from "overvalued" bonds to gold as the preferred hedge against a sharemarket rout.

Gold and bonds are usually negatively correlated – as one goes up, the other goes down. But in the past few months both have surged at the same time. Scratching his head, Gave turns to the history books for previous moments when gold and bonds have both been overbought, and what this might mean.

"The conclusion is striking: we are in a panic," Gave says.

There have been five previous instances since 2007 where bonds and gold have moved in tandem: the beginning of the GFC; the end of the GFC; the euro debt crisis that led to European Central Bank president Mario Draghi's "whatever it takes" pledge to save the euro in mid-2012; the slowdown in China which led to the G20 "Shanghai agreement"; and now.

"Acting in the middle of a panic is seldom a good idea. I would just continue selling bonds, and so raising cash," Gave says. "So what should investors do? My immediate advice would be to do very little right now."




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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
 
nipper
post Posted: Jul 20 2019, 11:34 AM
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This guy is a real gold bug. Maybe even right (so far)

https://www.sharecafe.com.au/2019/07/19/gol...recasts-raised/
QUOTE
I know this is the fifth time I am writing about gold but with the precious metal surging to fresh new multi-year highs I need to stress to readers the enormous opportunity that is being presented to investors....




--------------------
"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

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mullokintyre
post Posted: Jul 18 2019, 10:57 AM
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In Reply To: zac's post @ Jul 18 2019, 10:50 AM

Gold back on the upward march.
The paper derivative players have been beaten in this round.
Mick



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sent from my Olivetti Typewriter.

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zac
post Posted: Jul 18 2019, 10:50 AM
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In Reply To: nipper's post @ Jul 18 2019, 07:13 AM

Thanks nipper.

I think in the near future gold juniors will have more than their day in the sun.

Producers are a given. But juniors will provide greater leverage for massive gains (as long as they have potential near term mining resources).

Cheers


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nipper
post Posted: Jul 18 2019, 07:13 AM
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QUOTE
Hedge fund kingpin Ray Dalio is seeing a case for gold as central banks get more aggressive with policies that devalue currencies and are about to cause a "paradigm shift" in investing.

Dalio, founder of the world's largest hedge fund, wrote in a LinkedIn post that investors have been pushed into stocks and other assets that have equity-like returns. As a result, too many people are holding these types of securities and likely to face diminishing returns.

"I think these are unlikely to be good real returning investments and that those that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold," the Bridgewater Associates leader said....
https://www-cnbc-com.cdn.ampproject.org/v/s...al-markets.html



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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
 
zac
post Posted: Jul 11 2019, 04:03 PM
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In Reply To: nipper's post @ Jun 29 2019, 08:22 AM

I am hearing very good things about CLZ. Keep and eye on this one for excellent drilling results at Kat Gap soon.


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nipper
post Posted: Jun 29 2019, 08:22 AM
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Gold — that most defensive of all assets — is suddenly stirring. And this time around anyone can get a piece of the action thanks to the boom in exchange-traded funds.

After doing very little for almost five years, suddenly the combination of ever-lower cash deposit rates and ever-increasing fears for global markets have awakened gold investors as the price tops $US1400 an ounce.

Keep in mind that for six years between June 2013 and May this year gold traded in a tight range from $US1100 to $US1350. In Australian dollars the story is even better, with the yellow metal crossing an all-time high of $2000 a week ago.
https://www.theaustralian.com.au/business/w...391ce99421df8c6



--------------------
"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

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