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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Olaf Koch who started this subject4/11/2001 1:12:43 PM
From: MetalTrader  Read Replies (1) of 95453
 
disagreeing with you slob on semi's, not because the fundamentals aren't still falling..but because we are approaching trough valuations on some viz. trailing sales multiples and in the bottoming there are going to be alternating days of despondancy and euphoria in chips which should make a trader like you some money. Long term...they are well worth beginning to buy into...beginning I said...and it not based on analyst valuation du jour methodology which is more changable than March weather.

With regard to gold there is investing and there is armageddon buying. The gold price is tracking the rand, the A$ and Can$ indicating it is more a dollar hedge than a flight to gold as an investment yet. When March lease rates rose dramatically to 6% one month and 4% for three month the backwardation caused the short covering rally. A central bank recall of short end metal created a temporary liquidity squeeze.

Near term stock market volatility, high gold lease rates and declining interest rates can support the gold price near current levels, as can a weaker dollar. However ongoing central bank sales will be acting in an opposite fashion.

While long term I agree that gold is now a playable asset class, I am shifting my own focus from the unhedged to the hedged producers. Particularly NEM which S&P recently lowered to negative with a $1.1 billion net debt. I'll probably switch focus to something like Barrick or Homestake for less leverage and more balance sheet. For the foreseeable future I'll trade gold equities in the range as a contrary investment of the SI pain/pleasure barometer.

I continue to consider gold to be a nibble and purge investment until I see more fundamental and momentum change.

chihuahua in abstentia
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