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Gold miners / producers use a LOT of energy (OIL) so it's affecting their margins, but yes I agree gold miners look cheap. This was also mentioned on the CommodityWatch Radio broadcast

Well worth a listen:

http://commoditywatch.podbean.com/

Cheers I will have a listen to that later. I appreciate costs will rise and effect profits no matter what the oil price is.

BUT most gold stocks have pretty much remained at the same level while gold has been shooting up quite a lot. This has been different to other big movements in the price of gold I have been watching over the last 6 months....

Oh well all fun and games, let's see what happens !!

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To get finance, many gold mining companies sold forward (at fixed, lower prices) many years worth of their gold production.

They are now squeezed by rising extraction prices and can't benefit from rising gold prices. Actually, rising gold prices will make them go bust.

You want to make damn sure you only invest in truly unhedged companies (those who don't sell forward or enter any sort of gold derivative transaction with their financing banks).

Ok cheers. But that sort of flies in the face of most of the reasons I have heard for buying gold stocks in the first place. :ph34r:

All of North America's most popular gold mining stocks are falling or sitting flat recently even though the price has gone through the roof for the past few days. So according to your logic all these companies are not actually benefitting from the rising price of what they are producing ?

Barrick

GoldCorp

Kinross

Newmont

Silverado

Can that be true ? The problem I have is I have been watching the price of these shares in the last 3 months compared to Gold.

Result:

Gold shoots up = Shareprice shoots up.

Gold shoots down = Shareprice shoots down.

Very simple so far. ;)

This time it is completely different. Has something happened, why has the logic suddenly changed ? Or have I missed something. :blink:

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Ok cheers. But that sort of flies in the face of most of the reasons I have heard for buying gold stocks in the first place. :ph34r:

All of North America's most popular gold mining stocks are falling or sitting flat recently even though the price has gone through the roof for the past few days. So according to your logic all these companies are not actually benefitting from the rising price of what they are producing ?

Barrick

GoldCorp

Kinross

Newmont

Silverado

Can that be true ? The problem I have is I have been watching the price of these shares in the last 3 months compared to Gold.

Result:

Gold shoots up = Shareprice shoots up.

Gold shoots down = Shareprice shoots down.

Very simple so far. ;)

This time it is completely different. Has something happened, why has the logic suddenly changed ? Or have I missed something. :blink:

Well, you might be about to become very rich!

(might)

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I was starting to think that !! Cheers for the links above I will have a look. ;)

http://www.kitco.com/pop_windows/stocks/hui.html

The companies that make up the HUI are a good place to start into the world of gold stocks (if you think the price is going up, that's why they call it the 'gold bugs index'). Because these companies are largely unhedged, they should perform better than the Barricks of the world as the POG rises..

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http://www.kitco.com/pop_windows/stocks/hui.html

The companies that make up the HUI are a good place to start into the world of gold stocks (if you think the price is going up, that's why they call it the 'gold bugs index'). Because these companies are largely unhedged, they should perform better than the Barricks of the world as the POG rises..

Cheers. Lucky the one I chose is on that list. And #1 at the moment as well. Nice. ;)

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Fantastic day for gold shares - Barrick up over 9%, HUI up over 6% on a day when the DOW30 is down 227 points!!!!

Hopefully the gold stocks are beginning to decouple from the broad stock markets.

Yes - I've been buying etf silver over the last few months and am planning on topping up my position in AU before the end of the week. My predicament is whether to put it in ML Gold and General (I already have some of this) or whether to buy more PHAU (Gold etf). I am very bearish on equities at the mo and it is true that gold shares were sold off along with everything else in last year's turbulence (although have made it all back since), but it's also true that the gains could outstrip the price of AU itself, and given that I think AU could push £1000 this year, that's a significant potential return (could be 50% on some stocks easily IMHO). Trouble is, we'll only know what will happen to gold shares when the DOW really tanks and by then it's too late.

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A few gold thoughts from Richard Russell (322gold.com)

You don't time your gold purchases, you simply accumulate gold. Gold is pure tangible wealth and therefore it can never go bankrupt. In contrast, no fiat currency has ever survived the passage of time. All fiat currencies eventually become worthless in that over time they lose almost all of their purchasing power.

Edited by Errol
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Gold peaked at 861.10 at just after 1700 GMT according to Kitco - in other words 1 hour after London trading closed. Why then does the FT website report:

Gold led the initial advance, rising 3.3 per cent to $861.10 a troy ounce, surpassing the previous high of $850 reached in January 1980. The metal later eased back to $858.10 in late London trading.

Can some kind soul point me in the direction of understanding why I don't understand this?

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If Gold only just passed its last record, which was set in 1980, then surely it is either a very poor long term investment, or it is hideously undervalued, but then how do you value something that has very little material use other than to stick in a vault as a form of currency? Unlike many other commodities like oil or other investments like land, which actually have an intrinisic value to human survival and prosperity, Gold doesn't really. Saying that, most people don't think and if, as we expect, the dollar and pound are going down the toilet, people will go for Gold because that's what they've always done. Think it's better not to think too much sometimes.

Edited by HovelinHove
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If Gold only just past its last record, which was set in 1980, then surely it is either a very poor long term investment, or it is hideously undervalued, but then how do you value something that has very little material use other than to stick in a vault as a form of currency? Unlike many other commodities like oil or other investments like land, they actually have an intrinisic value to human survival and prosperity, but Gold doesn't really. Saying that, most people don't think and if, as we expect, the dollar and pound are going down the toilet, people will go for Gold because that's what they've always done. Think it's better not to think too much sometimes.

:ph34r::ph34r:

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If Gold only just passed its last record, which was set in 1980, then surely it is either a very poor long term investment, or it is hideously undervalued, but then how do you value something that has very little material use other than to stick in a vault as a form of currency? Unlike many other commodities like oil or other investments like land, which actually have an intrinisic value to human survival and prosperity, Gold doesn't really. Saying that, most people don't think and if, as we expect, the dollar and pound are going down the toilet, people will go for Gold because that's what they've always done. Think it's better not to think too much sometimes.

Gold is arguably the deepest market in the world. You could be lost in the Amazon, and some tribesman would give you food and shelter (probably for free) but surely for a sov or two!

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Hey gold experts, some advice if you can.

Firstly I only know of etfs which are traded in dollars - so are you all counting on sterling dropping in a similar way to the dollar to make up for holding gold in dollars?

Secondly is there a etf which is traded in euros and what do you think of buying gold in a currency other than the dollar, if indeed one can???

Thirdly is GBS.l an OK eft and why do none of you seem to mention it? Many thanks

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... Unlike many other commodities like oil or other investments like land, which actually have an intrinisic value to human survival and prosperity, Gold doesn't really. ...

The very common lie/misunderstanding that gold has no 'intrinsic' value was exposed several hundred pages back in this thread.

Gold has value for it's own sake because many other metals could be substituted by gold if they were not much cheaper, and gold has all the physical properties 'real' i.e. 'natural' money needs.

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Nice to see the golden goose taking wing, but with hindsight, back in '03, I'd have probably gone for some of this too:

This is how gold would have developed (or more) wouldn't it be 'managed' by central banks.

In the unfolding financial meltdown gold will catch up, and possibly even overshoot.

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Pressure is growing on the Bank of England for another cut in interest rates next week. Consumers face soaring petrol bills while their spending is being squeezed by higher mortgage payments and rising energy bills.

So why does inflationary concern put pressure on the BOE to cut rates? :lol:

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