hi IAC. your analysis is very much in line with captain hooks.
gold-eagle.com
was just wondering how you derived at the 175 to 185 number on the ^HUI. also if it does go that low what do you forsee for the HUI afterwards, will it rise to 300 plus or the rise would not be as spectacular as john embry in his latest interview speculates
The growing debasement of the U.S. dollar is setting the stage for gold to be increasingly recognized as returning to currency status.
2. And since the gold market is small compared to the paper money market, the impact on gold can be dramatic. According to Embry, we haven't seen anything yet.
3. He says the U.S. dollar will remain weak. He is bullish on gold in part because other countries don't want their currencies to rise against the U.S. dollar.
4. To date, the leading consumer of physical gold is India.
5. But going forward the Chinese will be the ones to buy gold. Chinese consumers are now allowed to buy gold, and the Chinese central bank would like to back the currency, the renmimbi, with gold.
6. Mr. Embry has stated previously, and still holds the view that gold production around the world will fall over the next few years.
7. It doesn't necessarily mean more consolidation in the gold sector. He says everyone thinks their properties are worth more than the others, so when they try to put them together, they can never reach an agreement.
8. Stock Pick: Queenstake Resources (TSX:QRL). He says the company is putting together a significant reserve base, with a capacity to produce 300,000 ounces.
9. No longer likes: Wheaton River Minerals. The stock has done well, but there's no upside left.
10. Still likes: Southwestern Resources (TSX:SWG). The stock rose 12 or 13 fold in 2003. It won't have the same upside, but it will move higher.
11. He doesn't like Barrick, as he says it's too hedged. Even though they are getting out of using hedging, Embry says getting out will be costly.
12. Investors, he says, are best to look at quality junior players, and the bullion itself.
13. 2004 will be better in terms of bullion price (he says it will go to $500 an ounce) but gold stocks won't likely see the same kind of appreciation they've had over the past couple of years.
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