Gold price dives through support to new low. Gold Bubble continues to deflate.; Gold price to drop another 15% this year say strategists at Societe Generale
Tweet Topic Started: 3 Apr 2013, 10:29 AM (37,654 Views)
Funny that herbie,you are maybe more familiar with the gold market but wish to sit back and have your dig at our goldbugs, I am more of a silver bug, and gave you all the low for the year by telling you all what a super bargain silver was on the 26th june this year, the exact low for the year
But the one thing I like more than silver is gold shares, I have explained all this long long ago.
Anyway, as for mining and mining costs of gold there is things you guys dont consider but since you speak of mining costs , I will briefly explain. As many of you know it costs some companies more to min egold than others and as you mentioned the costs of mining have increased since the boom, mainly because as the priced rised , many spent more on exploration costs and others would mine what used to be unprofitable mines. for example, I recently skimmed over a report from sbm, 140 pages long. which ran at a loss this year after making huge profits last year. they had aquired other mines with lower grades of gold, one mine they had were digging out 2 grams of gold per tonne, another they were getting 4 grams per tonne and another were getting 8 grams per tonne. they only just recently sold of fthe mine which was only getting 2 grams per tonne , which should lift and increase their profits over the coming financial year. barrick gold in the US , has three or so mines for sale in Australia, maybe a couple around kalgoorlie and and another at the plutonic mine, theses have now become less profitable to them since mining costs have increased and the gold price has dropped back.
Anyway the point I am getting at this, firstly many gold stocks have been hammered much more than gold itself, some gold shares are now cheaper than they were when gold was $500 per ounce, they are dirt cheap looking at the fundamentals, some companies can mine gold for $800 an ounce , others it may be costing them $1100 per ounce , depending on the grade in the ground, the depth of the gold, the hard or soft ground they are working with and the experince and quality of machinery they own or already own. So we have seen many companies close some mines or sell off some mines that were less profitable than others since prices have declined over recent times.
But here is the thing ,if a company is mining gold at a cost of say $1,100 per ounce and gold is selling at $1200 per ounce ,they are making $100 per ounce if gold goes up to $1300 per ounce , the profit for the company instantly doubles , if it were $1400 per ounce it quadripes the profit for the company, so a little rise from where it is increases prrofits enormously. and hence the closure of some as profits have decreased enormously on some since price falls. So some gold stocks are a bargain and a small increase in the gold price has massive increaese in company profits. I cannot stress enough how undervalued some are and how some of you may like to take a closer look. you have sort of missed the bottom as it seems that came in late june this year, but there is still much to br had, even on short plays.
I'm not having a "dig" - Rather, stating my impression.
I've got about 7 oz of Au 'n about a pound of pre decimal silver coins maybe? (All bought back around 2005.)
Having worked in the industry, it remains of general interest to me. But I'm not 'invested' in it in any real way at all.
And never will be. Unlike yourself, I simply don't value it highly.
Though I do find jewellery 'n gems rather interesting generally.
But again I'd never 'load up' on them so to speak - Simply don't see the value.
Fair enough herbie.
I do have some silver coins myself, but no real old ones, one of my favorite ones is our one dollar coin in 999 silver,looks brilliant.
I do have a few old gold ones though.
Its amazing what some collectors will pay for rare coins these days, some jaw droppers in the links below
By 'n large the world likes shorts generally about as much as it likes bears generally maybe?
You win some and lose some. I doubt very much it will rise to the point where I have decided to cover tonight, but you never know. When these reprobates in Washington come up with something, gold will probably dive back through 1280 again. Whether it gets me back in the black is another story, of course.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
i suspect support levels might carry some psychological weight with short term trades but I honestly lost track of how many supports were smashed on the way down with silver. Silver has been at just under half it's peak for a while and if gold does the same thing it will be around $900. Metal guys assure us it's all about the GSR
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