Together, Germany, France, UK, and Switzerland have more
than 10000 tons in reserves. The IMF has another 3500 ton. That adds
up to 4 years of world supply! Supply is not weakening: Lihir is coming on stream next year, and smaller mines like Las Cristinas, Cerro Casale, Cassandra, Hoyle Pond, Musslewhite, Kemess, Kumtor etc. as well as Newmount's discoveries in Peru and Indonesia, will swamp the market with low cost production. The mines I named alone will increase supply by about 4 million oz. a year, or 6%. So where is your gap?? Furthermore, EVEN IF there's a gap of 5%(assuming demand rises by 4% a year, and production drops by 1%, ) that's only 150 TONS A YEAR!! ANOTHER SALE BY AUSTRALIA, SINGAPORE, OR AUSTRIA, OR
GOD KNOWS WHAT PETTY LITTLE CENTRAL BANK, AND YOUR LITTLE SUPPLY GAP IS HISTORY. NOT TO MENTION A SALE BY THE IMF OF 10% OF ITS RESERVES, AND YOU WILL HAVE A NASTY GLUT IN YOUR HANDS!! BESIDES, WHERE'S INFLATION?? CHINA AND INDIA HAVE BROUGHT THEIRS UNDER CONTROL, AND SO HAVE THE REST OF ASIA AND LATIN AMERICA. THE DOLLAR IS STRENGTHENING AGAIN, AS INVESTORS REALIZE THAT THE US IS ACTUALLY SERIOUS ABOUT FISCAL RESTRAINT, WHEREAS CONTINENTAL EUROPEAN GOVERNMENTS ARE STILL PLAGUED BY SOCIALISM, AND CAN'T DO ANYTHING. GOLD PRODUCERS ARE NOT THE ONLY ONES SUPPLYING GOLD TO THE MARKET. IF YOU CAN JUST UNDERSTAND THAT, YOU WILL REALIZE THAT GOLD has little future. For all I know, silver has a much better supply/demand picture, with stockpiles barely a year's supply, and silver has been beaten up too! Besides the
potential of a market meltdown, there's no other reason to invest in gold right now(how many times do I have to repeat this?). If you must, at least buy a company with low costs(no Macassas, Delamars, Golden Kopjes, etc. ), no liabilities(legal and financial), and who was smart enough to hedge all of its production
for this century above $450, and who's actually paying a 3.2% dividend! And guess what! It's trading at a 52 week low, unlike Kinross!(no more hints: look for it yourselves, it's an ADR on the big board) Furthermore, If Kinross closes its mines, it will have to incur nasty writedowns that will probably wipe out that juicy 250 million that they have on their books. Macassa alone will cost around 100 million(severance payments, environmental liabilities, maintenance, etc.)I'm not trying to depress all of you. I'm just trying to present FACTS. Nobody has challenged any facts about the fundamentals of the gold market that I have stated. There's a lot of emotion on this thread(there's a lot of it on all the threads here!),
and too often I hear words like "I feel the stock will go up". Based on what? Warren Buffet certainly didn't become rich by buying on impulse. The fact that none of you challenges my opinion in a serious manner shows that rationality is against you. And rationality will ALWAYS win out. If you don't believe me, fine. Let's see Kinross in 5 months(barring the event of a crash). If there's no crash, it will be below $5, with gold at $290. I'd like to see someone else make predictions on this thread, and back it up with rational justification.
Regards and good luck,
Ming |
