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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (8624)	1/19/2008 12:04:27 PM
From: Jon Koplik	Respond to of 33421

NYT -- Gold’s Rise: It’s Not Just Armageddon ................................................... January 19, 2008 Market Values Gold’s Rise: It’s Not Just Armageddon By CONRAD DE AENLLE THE price of gold has always been a way to keep score of economic, financial and political instability, but the game may be changing. The dollar is weak, inflation is troublesome and the world isn’t getting any safer, but it is hard to see how those factors alone drove gold from just over $250 an ounce in 2001 to more than $900. The decline in the dollar over the same time works out to less than 5 percent a year. The reported level of inflation is a fairly ordinary 3 percent or so, and government calculations do not take account of falling home prices and technological innovations that give consumers more bytes for the buck. As for politics, terrorism remains a threat, but it seems no greater or smaller than it has been most of the decade. What has changed, many say, is that gold no longer benefits just from threats to prosperity but from prosperity itself. “Gold is the ultimate commodity, and it carries the added cachet as a safe haven,” said Robert D. Arnott, chairman of Research Affiliates, an asset-management firm. “Demand for gold plays a role in a strong economy, in a turbulent economy and also when there’s inflation.” The supply-demand balance could send gold to $1,000 an ounce before long, said Vahid Fathi, an analyst for Morningstar. New supplies of ore are hard to find, he noted, and central banks have scaled back bullion sales. As for demand, it is strong from “the new class of prosperous consumers out there in China and India that traditionally have an affection for gold,” he said. Gold has helped make a lot of investors prosperous lately, but betting on continued strong gains almost requires economic conditions to be ordered à la carte. Global growth must remain strong, even as it becomes palpably weaker in the United States and Europe, where most of the world’s money is. And because much of the rise in gold must still come from its role as an inflation hedge, the slowdown in the West must somehow be accompanied by rising consumer prices. Look at it this way: If gold is such a “heads I win tails you lose” proposition, then why did it perform so poorly for so long? Gold bulls have hailed the run to record highs as a breakout, heralding further advances — but it took 28 years to arrive. Neither Mr. Fathi nor Mr. Arnott could be considered gold bugs, that peculiar species of financial fauna with an unstinting belief gold prices rise perpetually. Mr. Fathi’s $1,000 target is not much more than 10 percent above recent levels, and his regard for mining shares is lukewarm at best. The dearth of fresh gold supplies raises prices, but it limits profit growth, he said, as do rising costs of commodities like aluminum used in processing ore. Those conditions drive him to look for companies that are holding the line on costs while developing reserves. Mr. Fathi is modestly bullish on Harmony Gold Mining and Yamana Gold and neutral on Newmont Mining and AngloGold Ashanti. He suggested that investors interested in mining stocks diversify by buying exchange-traded funds that specialize in the sector. INVESTMENT bank analysts appear more optimistic. Tony Lesiak at UBS has buy ratings on Newmont, Barrick Gold, Goldcorp, Agnico-Eagle Mines and Yamana. John Bridges at JPMorgan Chase assigns overweight ratings to Agnico-Eagle, Coeur d’Alene Mines, Goldcorp and Kinross Gold. He is neutral on Barrick and Newmont, the giants of North American gold mining. Peter Ward at Lehman Brothers is positive on the sector generally, but he advises underweighting Newmont and Barrick. Mr. Arnott seems to like gold much less than his peers. He finds it “attractive as a diversifier because it’s not correlated with mainstream stocks and bonds,” but he owns none and says that “it doesn’t make sense as a core holding ever” because almost every other investment returns more in the long run. As for gold mining shares, he reasons that they should outperform the commodity over long periods — but not if gold’s price is driven through the roof by the sort of unthinkable event gold bugs like to think about. “I don’t think planning on Armageddon is sensible, and if we have Armageddon, who are you going to sell your gold stocks to?” Copyright 2008 The New York Times Company.

To: Jon Koplik who wrote (8624)	4/23/2008 2:09:04 PM
From: Jon Koplik	Respond to of 33421

Reuters -- Organized crime seen penetrating energy sector .......................................... [Gee, when I heard "organized crime," my first thought was : do they mean hedge funds, or "old-fashioned" organized crime ...] Organized crime seen penetrating energy sector Wed Apr 23, 2008 6:54pm BST WASHINGTON (Reuters) - International organized crime groups control "significant positions" in global energy and strategic materials and are expanding holdings in the U.S. materials sector, the U.S. Justice Department said on Wednesday. A strategy on fighting organized crime released by the department also says such groups manipulate securities exchanges and conduct financial fraud to steal billions of dollars. It says they systematically corrupt public officials, use computer networks to target victims, and provide logistical support to terrorists and foreign intelligence services. "The activities of transnational and national organized criminal enterprises are increasing in scope and magnitude as these groups continue to strengthen their networking with each other to expand their operations," said FBI Deputy Director John S. Pistole (Reporting by Randall Mikkelsen, editing by Lori Santos) © Thomson Reuters 2008. All rights reserved.

To: Jon Koplik who wrote (8624)	4/26/2008 10:07:53 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 33421

WSJ piece mentions latest gold ETF physical "holdings" .............................................. April 26, 2008 Gold Futures Lose Their Shine By MATT WHITTAKER Gold investors, including those in the recently hot exchange-traded-fund market, are pulling out of the metal and returning to stocks as some see the U.S. economic outlook brightening and the dollar putting in a bottom. But some see inflation putting the mojo back in the metal later this year after this selling bout subsides. Gold prices have fallen more than 13% from their all-time peak of $1,014.60, set by the front-month contract on the Comex division of the New York Mercantile Exchange March 17. Friday, nearby April gold rose 40 cents to $887.20 a troy ounce, and was down 2.7% for the week. "It has lost some steam," said Bill O'Neill, a principal with Logic Advisors. "There is some asset reallocation going on. We are seeing some movement out of commodities and mainly into equities." Gold's safe-haven sparkle is fading as some see the worst of the liquidity crisis as over, said Mr. O'Neill, who expects gold to be in a broad range from $825 to $1,000. Support should come in if there are renewed problems in the financial sector and if oil prices continue rising. "The real crisis mentality has lessened," Mr. O'Neill said. As financial-market tensions ease and the U.S. dollar climbs, gold is looking tired. For example, gold responded with only modest gains when the euro and crude oil hit record highs Tuesday, moves that likely would have sent the metal soaring only a few weeks ago. Investors have also been selling their holdings in the world's largest physically backed gold exchange-traded fund, with this week showing a 7.8% drop in the tonnage held by streetTracks Gold Shares. According to the latest data available during Friday's trading session, from Monday to Thursday the fund's gold holdings fell from 641.82 metric tons -- roughly where it had plateaued since late last month -- to 591.19 metric tons. Physically backed gold exchange-traded funds have been popular with investors recently because they operate similarly to stocks, giving investors exposure to commodities without having to trade futures or options. As the worlds largest, physically backed gold ETF, streetTRACKS has amassed more tons of gold than some countries. In such a gold ETF, investors buy shares that represent a certain amount of gold that the fund then buys on the market and stores. When investors sell their shares, the fund sells the physical gold into the market. The selling of gold overall is temporary, said Larry Bilello, managing director of B&C Trading. "This pause will shake out some weak longs. The dollar was certainly oversold and due to be sold out." But gold is a harbinger of inflation, and analysts say that after hitting support around $850 to $860, the metal will likely then trade sideways before moving higher toward the end of the year as inflation again rears its head. Mr. Bilello sees $1,100 gold during the last quarter of this year or the first quarter of 2009. In the "very near term," gold will face some downward pressure from the Federal Reserve not being as aggressive in cutting interest rates -- moves that have pressured the dollar and strengthened gold as an alternative currency, said Bart Melek, global commodity strategist with BMO Capital Markets. The market expects the Fed will cut rates 0.25 percentage point on Wednesday and then take a pause, Mr. Melek said. But he doesn't expect the Fed to hold there indefinitely. "We will likely see more cuts from the Fed," Mr. Melek said. "At the same time inflation is still a problem. The use of gold as an inflation hedge will be resurrected." In other commodity markets: CRUDE OIL: Futures ended higher, flirting with $120 a barrel, on revived tensions between the U.S. and Iran and on the prospect of disruptions to North Sea oil output. It is anticipated that global supplies will be curtailed by the shutdown of the Forties oil pipeline in the North Sea and by a strike and an attack on oil facilities in Nigeria. An incident between a vessel chartered by the U.S. military and two speedboats believed to be Iranian took crude to an intraday high of $119.55. Light, sweet crude for June delivery settled $2.46, or 2.1%, higher at $118.52 on the Nymex. CORN: Prices at the Chicago Board of Trade rose slightly, as losses in soybeans and wheat erased early gains. Corn was sharply higher earlier in the session on forecasts for cold, wet weather in the U.S. Corn Belt that would delay planting. May corn rose one cent to $5.7725 a bushel. Write to Matt Whittaker at matt.whittaker@dowjones.com

To: Jon Koplik who wrote (8624)	7/31/2008 12:23:03 AM
From: Jon Koplik	Read Replies (2) \| Respond to of 33421

WSJ piece mentioning 673.4 metric tons of gold in a gold ETF ................................. I am not positive that "SPDR Gold Shares" is the same old ETF that seems to be the big one. The 1/5/08 post that I am replying to ... talked about the "streetTracks Gold Shares ETF." Jon. ******************************************************* July 31, 2008 Gold, at $902.90, Continues to Pull Back By CAROLYN CUI Gold's attempt to revisit the grand four-digit level is running into obstacles. Over the past two weeks, the yellow metal had a headlong plunge, falling 7.6% from its recent peak. Nearby August futures settled at $902.90 per troy ounce, down 1.5%, on Wednesday at the Comex division of the New York Mercantile Exchange. Gold's about-face underscores how rapid the sentiment has changed among market investors in recent weeks. A drop in oil prices has helped calm rampant inflation concerns. Some improving sentiment about the state of the U.S. economy, meanwhile, has supported the dollar, which got an additional boost from the Federal Reserve's decision Wednesday to extend loans to investment banks into 2009. The dollar rose to a five-week high against the euro for the second consecutive session. Dollar-denominated gold typically moves in an inverse direction to the U.S. currency. In a sign of waning demand, SPDR Gold Shares, the world's largest gold exchange-traded fund, saw an outflow of 32.5 metric tons, or 4.6%, from its highs, to 673.4 metric tons as of Tuesday.** Fund outflow indicates that investors are redeeming their shares in the gold fund. "It certainly followed the dollar and oil, which were very influencing," said Leonard Kaplan, president of Prospector Asset Management. Funds have been liquidating their positions in gold, and it will face more downward pressure as the commodity bull-run loses its steam, he said. Gold's sudden reversal has left analysts divided about the yellow metal's outlook. What happened to gold is in line with "the general selloff of commodities," said Joseph Foster, portfolio manager of the Van Eck International Investors Gold Fund. Gold has shown more resilience compared with oil, he said, which is now down 12.7% from a record settlement on July 3. Some analysts say the fundamental forces that have driven gold up remain intact. For the second quarter, mine production remained tight, while consumption isn't expected to have fallen as much as in the first quarter, said Natalie Dempster, head of investment at the World Gold Council's North American operations. Global demand for gold fell 16% in the first three months of the year, according to the council. Gold tends to be a darling of investors in times of uncertainty. Early this month, when problems with Freddie Mac and Fannie Mae triggered fears of the credit crisis, jittery investors rushed to safe-haven plays like gold. It has also been helped by rising inflation all over the world, as gold is regarded as a store of value. In other commodity markets: CRUDE OIL: Futures rebounded Wednesday as an unexpected, 3.5 million-barrel drawdown in gasoline stocks for the week ended July 25 highlighted the resilience of U.S. demand. Analysts surveyed by Dow Jones had forecast a modest build in gasoline stocks of 200,000 barrels. Light, sweet crude for September delivery settled up $4.58, or 3.75%, at $126.77 a barrel on the Nymex. Oil is now up 32% on the year and 66% from 52 weeks ago, but down 13% from its record close of $145.29. SUGAR: Prices on the ICE Futures U.S. exchange climbed as speculative funds re-entered the market and bought sugar. Higher crude-oil futures also added to the upward flow. October futures rose 0.58 cent to 13.40 cents a pound. Write to Carolyn Cui at carolyn.cui@wsj.com Copyright © 2008 Dow Jones & Company, Inc. All Rights Reserved.