Goldman Sachs Predicts Best Commodity Returns For 2011 In Precious Metals

[azogar]

http://www.bloomberg.com/news/2010-12-13/goldman-sachs-predicts-best-commodity-returns-for-2011-in-precious-metals.html

Gold will reach $1,690 an ounce in 12 months, from $1,390 now, and probably peak the following year, Goldman estimates. Gold in exchange-traded products backed by the metal reached a record 2,105 metric tons on Oct. 14 and holdings were last at 2,093 tons, according to data compiled by Bloomberg. That’s equal to about nine years of U.S. mine output.

as on-topic as threads about increased demand in Chinese tat

[The Masked Tulip]

So, do we try and fight GS or do we let our paranoia that this is all a cunning plan by GS to sucker us in and then short?

[Pole]

http://www.bloomberg.com/news/2010-12-13/goldman-sachs-predicts-best-commodity-returns-for-2011-in-precious-metals.html

as on-topic as threads about increased demand in Chinese tat

As a great fan of the HPC forum, let's face it.

Over the last five years, most of us have been wrong re the prices of two things:

precious metals and... houses!

[azogar]

As a great fan of the HPC forum, let's face it.

Over the last five years, most of us have been wrong re the prices of two things:

precious metals and... houses!

ha - never underestimate the silent majority!

[azogar]

in other news.....

Copper Surges to Record in London, 31-Month High in N.Y. on Chinese Demand

[BlinkTooFast]

So, do we try and fight GS or do we let our paranoia that this is all a cunning plan by GS to sucker us in and then short?

Hmm, yes, my knee-jerk reaction response, too.

There are a couple of other possible options, too...

1/ This is a double bluff and GS thinks that by saying PMs will rise* that we will do the opposite and get out of PMs to prevent them going exponential and bankrupting GS & JPM.

2/ GS have resigned themselves to PMs increasing exponentially, and are disguising bearish news as bullish news to meter our exponential expectations for PM growth down to 28% to stop us investing in them / to stop their own shareholders selling out.

Now, where's my TFH?

*Yes yes, PMs don't rise. Fiats fall against them, but that would have made the reference (more) awkward to follow.

[The Masked Tulip]

If money is getting out of bonds I just see it going into PMs as PMs are something that has some kind of substance.

Yes, PMs can tank too eventually but given a choice between shares and PMs and I can see the money going into PMs.

This does not mean the yellow stuff necessarily but stuff that has uses such as copper, the rare metals, etc.

[Number79]

The real question is will we benefit from a gold move to $1690?

If the dollar slides by a similar amount then the gain is nothing in sterling terms.

[General Congreve]

The real question is will we benefit from a gold move to $1690?

If the dollar slides by a similar amount then the gain is nothing in sterling terms.

It will continue to follow upwards in sterling. Firstly our debt problem is larger 'per capita' than the states, secondly the Euro going down in flames will hit us hard as well and thirdly the UK owns loads of lovely US debt (about $1 Trillion I think), so dollar trouble is our trouble too.

Personally I think $1690 is conservative and G.S. are trying to underwhelm potential investors. The big move is gold is going to kick off between now and the end of 2012 IMO. You don't want to be caught napping on the sidings when the train leaves the station.

EDIT: Also remember that the dollar is the World's Reserve Currency and therefore backs all the fiat currencies in the world (that is all currencies as they are all fiat). If the dollar collapses under the weight of US debt, it will take the global fiat money system with it. So even if your own currency maintains the illusion of stability, a dollar collapse will collapse the global monetary system (which will then need replacing with something sounder - like a new gold standard for example), thereby giving another sound reason to hold gold instead of something like Swiss Francs for example.

Edited December 13, 2010 by General Congreve

[Number79]

It will continue to follow upwards in sterling. Firstly our debt problem is larger 'per capita' than the states, secondly the Euro going down in flames will hit us hard as well and thirdly the UK owns loads of lovely US debt (about $1 Trillion I think), so dollar trouble is our trouble too.

Personally I think $1690 is conservative and G.S. are trying to underwhelm potential investors. The big move is gold is going to kick off between now and the end of 2012 IMO. You don't want to be caught napping on the sidings when the train leaves the station.

You can have gold up or you can have the dollar up but you cant have both so take your pick.

[The Masked Tulip]

You can have gold up or you can have the dollar up but you cant have both so take your pick.

Can't you buy gold US dollars and win win?

[General Congreve]

You can have gold up or you can have the dollar up but you cant have both so take your pick.

I presume you mean against sterling?

If the dollar goes down against gold it doesn't rule out sterling going down against gold as well. The dollar and sterling could maintain their current exchange rate, but both could fall against gold, or one could fall quicker. Gold behaves just like another currency in the currency markets. In the last 10 years both the dollar and sterling have weakened against gold (by a hell of a lot), so there's the evidence.

Please correct me if you meant something else?

[Realistbear]

TESCO

[200p]

Gold is getting expensive for the ordinary investor. Take part in the stocks of gold and silver miners. This is the next dot com.

AGQ - 10x from these levels? (For, The Masked Tulip. The founder is a fellow Welshman)

CRND - 100x from these levels?

OMI - 10x from these levels?

YAU - double or tripple

RRS - Double?

FRES - Double?

HOC - 2-5x from here?

CEY

Stick them in your ISA for Tax free gains.

---

Other non-Isable miners

MARL

SOLG

HGM (Abramovich a major shareholder)

KYS

MML

WARNING

GOLD STOCKS CAN GO DOWN AS WELL AS UP. PLEASE DO YOUR OWN RESEARCH. COMPANIES VALUED LESS THAN £200M ARE RISKY INVESTMENTS AND NOT FOR WIDOWS AND ORPHANS. THEY ARE LESS LIQUID ALSO. GOLD, THE COMMODITY IS SAFER AS IT CANNOT GO TO ZERO. IDEALLY RISK NO MORE THAN 2.5% PER TRADE. THANK YOU

And thats coming from a bull!

Edited December 13, 2010 by Money Spinner

[Number79]

I presume you mean against sterling?

If the dollar goes down against gold it doesn't rule out sterling going down against gold as well. The dollar and sterling could maintain their current exchange rate, but both could fall against gold, or one could fall quicker. Gold behaves just like another currency in the currency markets. In the last 10 years both the dollar and sterling have weakened against gold (by a hell of a lot), so there's the evidence.

Please correct me if you meant something else?

...maybe when I get time. You do need to sit down with the gold charts and currency charts though. You have some of this ar5e about face.

[200p]

Golman sachs and other investment banks love moving markets. Up or down they can make money which is why they all have stakes already in these companies.

Gold Euphoria

With what has happened in the world of late and what will be unfolding in the next 5 years or so those few investors who fully understand the impact the current economic situation is going to have on future inflation, the USD, interest rates, the stock market, physical gold and silver and gold and silver stocks and warrants in particular are going to be in the unique position of being the benefactors of currently unimaginable returns and wealth. All they need do, as I like to say, is “Just prepare and prosper!”

Back in the mid- to late 1970’s, as gold went up from its 1972 low of $60 to $850 in 1980 (and silver to $50), gold and silver stocks realized absolutely amazing gains:

· Lion Mines – 1975 price: $0.07 / 1980 price: $380 i.e. an increase of 542,757%!!!

· Azure Resources - 1975 price: $.05 / 1980 price: $109 i.e. an increase of 217,900%!!

· Wharf Resources - 1975 price: $.40 / 1980 price: $560 i.e. an increase of 139,000%!!

· Mineral Resources - 1975 price: $.60 / 1980 price: $415 i.e. an increase of 69,067%!!

· Steep Rock - 1975 price: $.93 / 1980 price: $440 i.e. an increase of 47,212%!!

· Bankeno - 1975 price: $1.25 / 1980 price: $430 i.e. an increase of 34,300%!!

The percentage returns above, averaging 70,627%, seem totally unbelievable but they are verifiable. They were achieved by investing in the right stocks at the right time. Imagine, and the above companies were only a handful of the gold and silver stocks that generated such astounding returns.

To put things in perspective let’s look at it this way. Had an astute investor divided a $10,000 investment equally among the 6 companies mentioned above in 1975 it would have grown to $7,072,700 just 5 years later! I can’t imagine that ever happening again but that is what actually happened back then. It is absolutely amazing, isn’t it? Even a 10,000% appreciation would have turned that $10,000 into $1 million dollars! Remember, it only takes a few good investment decisions in one’s life to be exceedingly successful and that was such a time.

Are you are of the opinion that the U.S. dollar is going to continue to weaken against other currencies? Are you of the opinion that we are going to have significant inflation in the next few years? If so, then we are going to see gold and silver doubling or tripling in price as a result. As such, it is imperative that you invest in either the stocks of the companies that mine the gold and silver and/or in the royalty companies that buy the gold and silver from mining companies at predetermined fixed prices. Better yet, much better in fact, is that, wherever possible, you should purchase certain of the long-term warrants offered by some of the gold and silver mining and royalty companies as a means of realizing your +5,000% returns.

Why Buy Gold and/or Silver Mining/Royalty Stocks instead of Physical Gold or Silver? To Double Your Returns – or Possibly More!

If gold, for example, were to escalate considerably in price (i.e. to $2,000, $3,000, or even more) in the next few years it would have a significantly positive impact on the profitability of the companies who mine it and the royalty companies that buy it from marginal producers. For example, with gold priced at $1,000/oz., and the cost of production at perhaps $600/oz. the gross profit margin of gold mining companies would be 40.0%. If 2 years from now, however, gold were to increase to $2,000 and the cost of production were to increase by only 20% to $720/oz. then the mining companies’ gross profit margins would have gone up from $400/oz. to $1280/oz. or 220%!

That’s called leverage and historically, in a rising market, the ratio for gold and silver mining/royalty shares vs. physical gold ranges from about 2.5:1 for large-cap companies (currently 2.6:1 YTD for HUI companies according to the table above) on average to as much as 6:1 for gold and silver mining/royalty companies (currently 3.9:1 YTD according to the Gold/Silver Companies with Warrants Index), on average and even 10:1 in exceptional circumstances for certain truly outstanding performers. All the more reason for you to do your due diligence to find and invest in those gold and silver mining and/or royalty companies with the right mix of capable management, strong financing, major resources and geographically and politically well-located properties and reap the major benefits of such a surge in the future price of gold and silver.

Why Buy the Warrants instead of the Stock of Certain Gold/Silver Mining and Royalty Companies? To Further Double Your Returns – or More!

For those of you who are prudent enough to do your homework and buy the right long-term warrants associated with the right gold and silver mining and/or royalty companies at today’s undervalued prices, your eventual returns would likely be 1.5 to 3 times greater (currently 1.4:1 YTD for the Precious Metals Warrants Index vs. the Gold/Silver with Warrants Index) on average than had you invested in their associated stocks. For companies whose stock prices go through the roof with monster gains that ratio could even be as high as 5:1.

That’s referred to as leverage-on-leverage or doubling-up on the leverage factor. The catch is, however, that you have to know whether or not the warrant associated with the stock you are interested in buying is the right warrant i.e. has a leverage/time value sufficiently high enough to justify its purchase given the anticipated appreciation in the price of the associated stock. For those who don’t have a clue what a warrant is, which companies have them, which have the best values, exactly how to go about buying them and which on-line brokers are sufficiently knowledgeable and capable of placing American, European, Australian and Asian orders (there are no problems for Canadians placing such orders with their brokers as most such securities are traded on their TSX or TSX Venture exchanges) check out the PreciousMetalsWarrants site below.

Can Gold and Silver Equities Expect +5,000% Returns Once Again?

Using the above ratios the answer is: “Yes they can!” True, not all such companies with reap such returns but a few of the well chosen ones will once again see returns that most gold bugs dream about. All it is going to take is an environment in which some combination of a declining U.S. dollar, rampant inflation (or fear thereof), high interest rates, ongoing financial instability, further economic turmoil and occasional acts of terrorism come together to interact with high gold and silver prices and some trading mania. We are moving in that direction right across the board so it is just a matter of time.

We are in the eye of the storm and when the other side of the vortex engulfs us gold and silver will increase considerably, their associated stocks will go up substantially and their warrants, where available, will escalate dramatically. Those mega returns can be yours in the future if you start today to prepare for that day.

[Realistbear]

FORD

[Bloo Loo]

Goldman CHARGES for its advice...mega bucks.

they dont release advice....unless they can profit.

[General Congreve]

Gold is getting expensive for the ordinary investor. Take part in the stocks of gold and silver miners. This is the next dot com.

AGQ - 10x from these levels?

CRND - 100x from these levels?

OMI - 10x from these levels?

YAU - double or tripple

RRS - Double?

FRES - Double?

HOC - 2-5x from here?

Stick them in your ISA for Tax free gains.

---

Other non-Isable miners

MARL

SOLG

HGM (Abramovich a major shareholder)

KYS

CEY

MML

Thanks for the list. Junior miners made investors a mint in the late 70's when gold rocketed. I am looking to take a position soon. However, a good solid lump of physical as a core investment should be a priority. Miners can always be nationalised and/or profits punitively-taxed. Physical gold is a lot harder to get at than gold shares and funds and there is absolutely no counter party risk.

So, physical gold for a safehaven investment to protect your wealth and bring in decent real returns, miners for a speculative gamble, that all being well will pay off in spades.

[General Congreve]

FORD

$1374

Edited December 13, 2010 by General Congreve

[azogar]

RB - all due respect but can you please refrain from trolling this thread i started

[General Congreve]

...maybe when I get time. You do need to sit down with the gold charts and currency charts though. You have some of this ar5e about face.

Gold going up against all currencies, or rather all currencies sinking against all gold, 5 year charts on left hand side...

http://www.usagold.com/gold-price-forex.html

Bottom line is just because the bloke in the bed next to you might seem sicker than you do, it doesn't mean your terminal illness is any less life threatening.

I cannot see how a weak dollar versus gold makes sterling look a better bet at the end of the day. When you look at the story behind the current problems (think debt) this is ultimately a one horse race.

Edited December 13, 2010 by General Congreve

[Realistbear]

RB - all due respect but can you please refrain from trolling this thread i started

Sure. Done by bit to remind the bugs that there is more to life than the yellow shiny stuff! Oh--and other commodoties are out there too! There is no troll like a gold troll.

[200p]

Poor Veneuzela Boliva (gold price):

Has that got your attention now?

The time to sell is probably when interest rates hit double figures. Remember that!

Edited December 13, 2010 by Money Spinner

[azogar]

Sure. Done by bit to remind the bugs that there is more to life than the yellow shiny stuff! Oh--and other commodoties are out there too! There is no troll like an anti-gold troll.

corrected for you

and you should know