<<first of all i didn't say it had to stay there for very long. second of all there is plenty of gold in central bank vaults to supply any needs. they could massively unload on the market in a panic.>>
how do you know that? while the totals are in dispute, it seems a very large amount of central bank gold has been lent out. very few CBs actually publish the state of their gold reserves, but of those that do i can for instance cite the Res. Bank Of Australia, which has reserves of 78 tons, of which 74 tons are lent out. i know of at least 8 peripheral CBs that have lent out their ENTIRE reserves. the only two central banks/governments that almost certainly have all their gold still sitting where it belongs (in the vault) are the Bank of France and the US treasury. the CBs also have no reason to 'massively unload in a panic'. for one thing, the largests CB gold holders are signatories to the WAG that limits their gold sales, and for another they all have their gold on the books for $35-$42/oz. it's a reserve asset...why should they 'panic' due to changes in its free market price?
<<i didn't say it had to correlate to the stock market. i simply said that if the market tanks gold will probably go with it. more than likely because if the market keeps tanking people will buy into the deflation scenario where cash is king, not gold. anyway you're right, gold isn't correlated to practically anything anymore--except pain! all it does is go down no matter what is going on with the markets.>>
saying that gold will tank if the market does, means you think they're correlated. the rest of what you're saying is what made me as a contrarian look at gold. the negative sentiment is pervasive and overwhelming, smells like a bottom. gold retains its purchasing power during deflationary periods (see a study by Dan Ascani that looked at gold during deflation from the 16th century onward) while the input costs of the miners fall. the metal itself won't produce big nominal returns, but you'll get those in the mining stocks.
<<i care only to the extent that i was pointing out since abx has done so well over the long-term for their shareholders when unhedged stocks haven't, it's positively ludicrous for people to go on and on about how much abx sucks. those people aren't thinking logically. last time i checked shareholder value was high on the list when judging a company. apparently illogical conspiracy theorists need a scapegoat and abx fits the bill. their problem, not mine.>>
you keep looking backward instead of forward. it was a decent stock to own during its growth period, and it provided some shelter during the gold bear that began in '96 (falling only 60% instead of 80% to 90% like many other mining stocks). you keep ignoring the main point of my argument, which is that you want to own gold stocks to be exposed to upside potential in gold, not to be sheltered from its downside potential. and ABX isn't a small miner anymore that will grow into a big one. that period is behind it - it's already big. and overvalued.
<<just because they are off the lows doesn't mean they are in a bull market. tell me what defines gold stocks being in a bull market for you, because so far i consider it a bear market rally until shown otherwise.>>
imo they have already proven otherwise. the gold stock index i'm watching (the HUI, an index of unhedged and lightly hedged gold stocks) has risen from low to high by 100% in a period of roughly 6 months. that's not a bear market rally. bear market rallies tend to be over after two months at most, and while sharp gains are not uncommon, the doubling of an index's value is. another reason i have is the wave count - the advance has been impulsive, a bull market attribute. so from a technical standpoint, it's a bull market until proven otherwise.
<<well i don't have anything bad to say about harmony either. i'm not the one who is blaming bear markets on gold stocks.>>
and i am? i have to add though that the mechanics of forward sales make it rather obvious that they have CONTRIBUTED to the gold bear market (i'm assuming you're privy to these mechanics, if not i'll be happy to explain). market participants are well aware of this. when PDG announced early last year that it would reduce its hedge book, gold rallied over 20 bucks in a single day.
<<a 3000% return is some kind of baggage huh! yes i would feel so much better knowing i was buying a "real" gold stock and not a quasi hedge fund while i sat with no capital gains after 15 years holding a "real" gold company like hm. who cares how they did it, abx has delivered shareholder value, and that is the bottom line.>>
see my comment above. the past is not necessarily indicative of the future. the internuts used to be a great investment as well, at one time. |
