Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (47928)	12/22/2005 7:50:44 AM
From: Crimson Ghost	Respond to of 110194

Gold expected to rise further in 2006 Analysts raise price forecasts citing market basics, economic growth and inflation Asia Business Times (LONDON) The market fundamentals and macroeconomic factors that lifted gold's price more than 25 per cent this year will drive it still higher in 2006, analysts said. Leading research houses and investment banks have raised their price forecasts saying market basics, economic growth and inflation and gold's classic safe-haven role could attract more players into the market. JP Morgan Securities have lifted its long-term gold price forecast to US$500 an ounce from US$450, with an average price of US$558 in 2006 and US$609 in 2007, while Merrill Lynch upgraded its 2006 estimate by 19 per cent to US$525 an ounce. Most of the forecasts suggest average prices in the next year above US$500, nearly double the level five years ago. 'I don't see any reason why this interest in gold will go away,' said Stephen Briggs, economist at SG Corporate and Investment Banking, which forecast average prices at US$515 in 2006 and US$550 in 2007. 'And this is against reasonably robust fundamental picture of sluggish supply, strong physical demand and the insistence of the market that the story on central banks is a positive one.' Last week, spot gold surged to US$540.90 an ounce - the highest level in nearly a quarter of a century, but slipped by more than 7 per cent since then mainly on profit booking. The market was abuzz this month with talk that some central banks planned to add gold to their reserves. 'There is no guarantee that there will be buyers, but the point is that the market thinks and hopes that they will and that's just the sort of bullish spin, even if it is against the actual fact,' Mr Briggs said. Others also echoed the sentiment. 'If India, China and Japan are going to increase their reserves to a meaningful level for forex diversification, they will need at least around four to five years of mine production. The gold market is so small to allow for that,' said Yingxi Yu, analyst at Barclays Capital. Dealers and analysts say that worries about inflation on the back of higher oil prices and concerns about US growth, along with an unstable US dollar, have boosted gold prices and the same factors would play a crucial role in 2006. 'People are still having worries about the economy and inflation. They still feel they want to have gold,' said Simon Weeks, director of precious metals at ScotiaMocatta. Analysts said the US dollar was likely to weaken in 2006 and that should provide further boost to the metal. 'If the US dollar happens to weaken then that would be good for gold probably, (although) gold has been dancing to its own tune recently so it doesn't necessarily follow,' said Paul Merrick at RBC Capital Markets, who saw average gold price for 2006 between US$540 and US$550. Gold generally rises with a drop in the US dollar as the metal becomes cheaper for other currency holders. But the traditional inverse relationship has been broken in the past several weeks. 'We are now in a situation really where investor interest is so much that gold can benefit if the dollar declines, but it doesn't suffer particularly if the dollar strengthens,' Mr Briggs said. Analysts said it was the positive sentiment generated by bullish comments by industry experts at different forums that had been helping the metal, and positive fundamental factors also helped. 'There is a lot of post-rationalisation by people who already hold long positions in gold and are hoping to drive prices higher, but this will continue to boost investor interest in gold,' said Mr Yingxi of Barclays. Consumers are becoming more and more accustomed to higher gold prices and as a result, it's difficult to be aggressively bearish on gold, said Alan Williamson, head of commodity research at HSBC Bank. Analysts said inflation was not an issue for most of the financial markets and was likely to remain subdued in 2006, but the gold market believed that it was a concern. 'So it doesn't matter really whether it is or it isn't, the gold market has decided it is an issue,' Mr Briggs said. Gold had positive fundamentals, with global gold output to remain static for the next year before starting a slow decline because of lower ore grades at key mines. 'We remain bullish on gold over the medium to long term and believe that the arguments for gold outweigh the arguments against,' Merrill Lynch said in its latest global commodity price review. 'Our thesis through the year has been that gold is in a longer-term uptrend based on a capping of supply from the mines in a combination with the prospect of an escalation in the evolution of the Chinese luxury goods cycle and jewellery purchases,' JP Morgan said. - Reuters

To: ild who wrote (47928)	12/22/2005 12:01:08 PM
From: aknahow	Respond to of 110194

Am getting old and don't know if this was already posted. Some insist gold held by ETF's has only minor impact on the pog. CT on the Yahoo NEM board is one of those that claims it has no impact. He points to the fact that the pog went down as holdings of gold at GLD went up. While I understand that the ETFs and GLD in particular represent just another way to own gold, I still believe that the existence of GLD makes it easier to buy and hold gold. I would not buy a significant amount of physical gold because of transaction cost, storage, and insurance cost, but I would buy GLD. Don't feel I am totally alone. Some of the ownership is probably also new but for the purpose of hedging portfolios. So at least on the margin, I have no doubt the buildup in GLD is a positive for the pog.

To: ild who wrote (47928)	12/22/2005 12:22:25 PM
From: ild	Respond to of 110194

Date: Thu Dec 22 2005 12:52 trotsky (JD@GBN) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i like that one a lot as well. also worth looking at in the juniors sector are MRB, OZN and NSU imo - i consider them all undervalued. NSU has a little more political risk weighing on it than the others, but the market doesn't accord its Eritrean property any value anyway ( although it would probably be valued at a billion or so if it were in a 'safe' region ) . OZN has some of the best properties in Burkina Faso and its JV with GFI practically ensures they will be developed. MRB is probably worth more than twice the price it's currently trading at, depending on the outcome of the permitting process at Cerro San Pedro. all have solid balance sheets. all of this with the caveat that these stocks are very volatile and only worth owning as long as the gold bull market remains intact of course. Date: Thu Dec 22 2005 12:42 trotsky (asset and credit bubbles) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved are NOT 'wealth'. selling houses to each other at ever increasing prices on account of a massive inflation of credit and money supply does NOT, i repeat, NOT, constitute wealth generation. the big flaw in measuring the balance sheet of US households is that inflated asset prices are subject to considerable risk ( does anyone remember that the Nasdaq 'non-bubble' collapsed by 80% from the highs at one point, and remains some 60% below those highs 5 years later? ) , and this is especially true of the inflated prices for residential real estate, which have been supported by THE biggest credit bubble the world has ever seen. when these prices revert to the mean, the debts that have been incurred in the course of the bubble will unfortunately remain as large as ever - and since US savings rates have gone negative for the first time since the Great Depression, there will be little to fall back on when the household balance sheet suddenly deteriorates, as it inevitably must. hosuehold debt service as a percentage of income is at fresh record highs in spite of generational lows in long term interest rates - an unprecedented mountain of financial claims towers over an ever smaller sector of the economy that is actually engaged in true wealth generation. this is the logical outcome of a fiat money system anchored to nothing. Date: Thu Dec 22 2005 12:27 trotsky (frustrated) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "An inflation gauge tied to personal consumption fell by 0.4 percent, the biggest one-month decline on record. Excluding food and energy, inflation was up a slight 0.1 percent in November." this is excellent news for gold, as it means the Fed can go back to inflating at full blast. Date: Thu Dec 22 2005 12:21 trotsky (PoP-eye @DROOY) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved from its closing lows in the summer, DROOY is up some 120% approximately. from its intra-day trading lows, 240%. how did CALVF do? currently, DROOY is THE cheapest mid tier producer stock - it makes a lot of sense to buy it at this price. in terms of reserve valuation it trades at a 65% discount to e.g. HMY ( HMY was the 4th best performer in the HUI this year, and it sports a reserves valuation at the low end of the international range ) , in terms of valuation per oz. of production it trades at roughly a 50% discount to other mid tier producer shares. the stock often goes sideways for long periods after a strong up move. the last consolidation period resulted in a rally of 50%. in short, the best time to buy it is after it has done nothing for a while. JD probably timed it just right. Date: Thu Dec 22 2005 11:59 trotsky (Elliott, 10:39) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved bravo, spoken like an obedient brownshirt. an excerpt from a recent grilling of Scot McClellan by the press: "Q Another question. It's our understanding this power ( spying on citizens ) has been used 18,000-plus times. Are we to presume that there are that many al Qaeda agents in this country? " "MR. McCLELLAN: I'm not going to get into talking about more than what we've said publicly. That's getting into more than what we've talked about publicly, so I'm not in a position to confirm or deny the numbers that you threw out there." 18,000? Al Quaeda probably has a few hundred members, of which maybe a handful could be deemed of any intelligence value ( the rest are hanger-ons ) . most of these guys are in the mountains of South Waziristan. so let's illegally spy on 18,000 US citizens - nothing to be afraid of, right? we're only 'defending our liberties'.