Author Topic: #1 Problem For Gold Miners  (Read 834 times)

0 Members and 1 Guest are viewing this topic.

charlesoakwood

  • Guest
#1 Problem For Gold Miners
« on: May 11, 2011, 04:04:10 PM »

2 minute video
http://www.thestreet.com/video/11029690/index.html#810074192001


http://www.thestreet.com/story/10992139/1/gold-prices-where-will-they-finish-2011.html
...
The SPDR Gold Shares(GLD_) dropped more than 50 tons of gold in January, a third of what the ETF added in 2010 and has dropped 13 more tons since then. Jon Nadler, senior analyst at Kitco.com, has been warning of a fast and furious exit by traders and hedge funds, which could pummel the gold price.

"I would expect a sell by date in this market could come before the 2011 trading period is over." Nadler predicts that gold could slip to $1,150 an ounce and if that level doesn't hold, gold could drop past $1,000.

Goldman Sachs, ...has also said clients should sell commodities that their rallies might be overdone for now.

Jimmy Rodgers ...stands behind his long term $2,000 gold price prediction.


It appears the #1 problem is agreement.

Much more at links:http://www.thestreet.com/story/10992139/1/gold-prices-where-will-they-finish-2011.html


Online Weisshaupt

  • Conservative Superhero
  • *****
  • Posts: 5185
Re: #1 Problem For Gold Miners
« Reply #1 on: May 11, 2011, 05:49:40 PM »

The SPDR Gold Shares(GLD_) dropped more than 50 tons of gold in January, a third of what the ETF added in 2010 and has dropped 13 more tons since then. Jon Nadler, senior analyst at Kitco.com, has been warning of a fast and furious exit by traders and hedge funds, which could pummel the gold price.


Nadler has been calling the 10 year rise in Gold prices a bubble for almost 10 years now.  He is a Neo-Keysian and firmly believes government spending increases growth and GDP. I for one am grateful for this reprieve and fall in prices ( though I am not convinced I have a good handle on the causes) Nadler said $500 gold? Inconcievable! 800? Impossible 1500 No way.  What is the point of listening to a guy who has been constantly wrong ( other than getting a good laugh)

The fast and furious exit of ETFs could mean that investors feel there are more profitable growth/momentum trades to be made elsewhere, or it could simply be an acknowledgement that Gold and silver are traded at ratios of at least 10:1, if not 100:1 and there won't be enough physical bullion to cover the calls if dleivery is demanded. These big players may own enough Paper gold that they fear that demanding it physical will crash the system, so they move out and buy other stuff.  These guys are all day traders - they don't invest on rational criteria other than if the herd is moving that way, and as long as I call it quits before the herd, I make money.

Thefundamentals haven't changed. Ireland is taxing pension and retirements, all of Greece is on strike and Obama is trying to get banks to give out bad sub-prime loans again.  Hey,if the recovery is real, thats great. It might buy us a few years before the SHTF...


Offline Predator Don

  • Conservative Superhero
  • *****
  • Posts: 4576
Re: #1 Problem For Gold Miners
« Reply #2 on: May 11, 2011, 06:13:21 PM »

The SPDR Gold Shares(GLD_) dropped more than 50 tons of gold in January, a third of what the ETF added in 2010 and has dropped 13 more tons since then. Jon Nadler, senior analyst at Kitco.com, has been warning of a fast and furious exit by traders and hedge funds, which could pummel the gold price.


Nadler has been calling the 10 year rise in Gold prices a bubble for almost 10 years now.  He is a Neo-Keysian and firmly believes government spending increases growth and GDP. I for one am grateful for this reprieve and fall in prices ( though I am not convinced I have a good handle on the causes) Nadler said $500 gold? Inconcievable! 800? Impossible 1500 No way.  What is the point of listening to a guy who has been constantly wrong ( other than getting a good laugh)

The fast and furious exit of ETFs could mean that investors feel there are more profitable growth/momentum trades to be made elsewhere, or it could simply be an acknowledgement that Gold and silver are traded at ratios of at least 10:1, if not 100:1 and there won't be enough physical bullion to cover the calls if dleivery is demanded. These big players may own enough Paper gold that they fear that demanding it physical will crash the system, so they move out and buy other stuff.  These guys are all day traders - they don't invest on rational criteria other than if the herd is moving that way, and as long as I call it quits before the herd, I make money.

Thefundamentals haven't changed. Ireland is taxing pension and retirements, all of Greece is on strike and Obama is trying to get banks to give out bad sub-prime loans again.  Hey,if the recovery is real, thats great. It might buy us a few years before the SHTF...



The recovery isn't real because it isn't there. Imo,it's not based in real growth. It's printed money and dowsizing. If gold and silver fall, it isn't because the economy is getting better.

Large companies have downsized to the point of profitability. Lots of companies are making money overseas.I manage my business with the understanding 20% of the population are not my market anymore, soon 20% of the globe will not be in any companies projections. My risk meter is non existent.

I read the sub prime story....We will never learn. Jobs are chit. Increases in income are not there. Inflation is being manipulated.

We will see some costs fall...not because of demand, but of glut of supply. I believe we will double dip again.
I'm not always engulfed in scandals, but when I am, I make sure I blame others.

Online Weisshaupt

  • Conservative Superhero
  • *****
  • Posts: 5185
Re: #1 Problem For Gold Miners
« Reply #3 on: May 11, 2011, 07:25:05 PM »
The recovery isn't real because it isn't there. Imo,it's not based in real growth. It's printed money and dowsizing. If gold and silver fall, it isn't because the economy is getting better.....We will see some costs fall...not because of demand, but of glut of supply. I believe we will double dip again.

I don't disagree. As economies around the world stumble we would expect prices to fall because demand is falling, inventories are risin, and the consumer base for a lot of products is shrinking .. I haven't be able to positiviely identiy falling demand/increasing supply  as the culprit of this recent turn. Dollar is up at the moment as well, and I don't know what caused that turn around either.  I don't discount the possiblity that all of my doom and gloom is misguided,  I just don't see how it won't all ultimately fall in the end .. no matter if the end is 2011 or 2020.  QE bought me time to leave te building, and I am grateful for every second of it. 

Offline Libertas

  • Conservative Superhero
  • *****
  • Posts: 41681
  • Alea iacta est! Libertatem aut mori!
Re: #1 Problem For Gold Miners
« Reply #4 on: May 12, 2011, 07:16:58 AM »
I think the fear of being left naked and the herd mentality is causing some flight from ETF's, but the video got me thinking...here are mining chiefs saying inflationary costs are impacting profitable operations.  This is stunning.  Think about it, people usually cannot dig gold out fast enough when prices are rising, but inflationary pressures from oil and its at tendent products, labor etc is driving up costs.  I don't know at what level they hit breakeven, but if production starts to slow dramatically, then supply will contract and how can that not cause additional upward price movement, assuming demand is steady?  It's the same cycle OPEC plays with, improving profit margins by scaling back production and causing prices to rise.  But OPEC often lacks the cohesion to manage incremental releases of additional inventory by its members to keep prices supported for very long, a greedy few will always trade more, or nonmembers will benefit from the situation.

Frankly, I see no fundamental reason to believe precious metals are in danger of dropping, far too many inflationary demons out there to slay.  And too many fragile economies one strong jolt away from disaster.  We may see some swings as speculators move in and out or whenever a new hoard is brought to market, but I think the general trend in prices is still more toward up than down.  I think we're pretty close to the new re-set point, so I'm going to partake of some bargain hunting.
Irrumabo!  GOP? - Nope. No more. They made their bed, now let them die in it.*
* © Libertas (H/T Glock32)

Offline Predator Don

  • Conservative Superhero
  • *****
  • Posts: 4576
Re: #1 Problem For Gold Miners
« Reply #5 on: May 12, 2011, 03:29:57 PM »
The recovery isn't real because it isn't there. Imo,it's not based in real growth. It's printed money and dowsizing. If gold and silver fall, it isn't because the economy is getting better.....We will see some costs fall...not because of demand, but of glut of supply. I believe we will double dip again.

I don't disagree. As economies around the world stumble we would expect prices to fall because demand is falling, inventories are risin, and the consumer base for a lot of products is shrinking .. I haven't be able to positiviely identiy falling demand/increasing supply  as the culprit of this recent turn. Dollar is up at the moment as well, and I don't know what caused that turn around either.  I don't discount the possiblity that all of my doom and gloom is misguided,  I just don't see how it won't all ultimately fall in the end .. no matter if the end is 2011 or 2020.  QE bought me time to leave te building, and I am grateful for every second of it. 

Honestly....I haven't identified the falling demand either. It scares the chit outa me. Oil drops 10 bucks a barrel? Silver drops...Dollar up slightly....I can't make sense of any of it.

Listened to the Cisco CEO this morning...Consolidating sales and Engineering, smaller product focus, leaving less profitable products for others. Bothered me when he states normal time to develop  product was 3-4 years, but now no more than 18 months. I believe everyone is hedging the uncertainty and imo, points to nothing but volitility in jobs and the economy in general.
I'm not always engulfed in scandals, but when I am, I make sure I blame others.

Offline radioman

  • A Regular
  • ***
  • Posts: 618
Re: #1 Problem For Gold Miners
« Reply #6 on: May 12, 2011, 03:46:53 PM »
Article on drudge is saying we may go back to the gold standard. How is that going work out?
TGIF - "Thank God I'm Forgiven"

Offline Predator Don

  • Conservative Superhero
  • *****
  • Posts: 4576
Re: #1 Problem For Gold Miners
« Reply #7 on: May 12, 2011, 03:48:27 PM »
Article on drudge is saying we may go back to the gold standard. How is that going work out?


Good question. We are so far removed.
I'm not always engulfed in scandals, but when I am, I make sure I blame others.

Online Weisshaupt

  • Conservative Superhero
  • *****
  • Posts: 5185
Re: #1 Problem For Gold Miners
« Reply #8 on: May 12, 2011, 04:58:00 PM »
Article on drudge is saying we may go back to the gold standard. How is that going work out?

A pure gold standard is unlikely. There just isn't enough..if you were to back the U.S money supply with just gold, gold would be $50K an ounce.
Its far more likely that you are going to see the dollar decline, and SDRs become the new reserve-- with special exchange rates for th MVPS like China - the United States will not be among them.In order to gain acceptance the SDRs will probably be based on a basket of commodities and tied to "healthy" currencies and strong economie by set exchange rates.

Offline Libertas

  • Conservative Superhero
  • *****
  • Posts: 41681
  • Alea iacta est! Libertatem aut mori!
Re: #1 Problem For Gold Miners
« Reply #9 on: May 12, 2011, 07:14:08 PM »
Absent specific reasons sector or broad based reasons, when most everything in the various markets drop its usually a sign that people are cashing out, taking what gains they have and parking it until they can figure out where to go with it.  As for a gold standard, the lack of supply would make demands hard to meet so pegging a currency to it can be problematic.  IN a perfect world currencies should stand on their own without any subsidies or manipulation, but that's not the way it works right now, it's all about manipulation now to what a nation desires to gain.  The BRICS for example are looking to leverage their own advantages, but it will be hard getting them to agree to the same policies and China especially will be interested in being the dominant player at that table.  Everything points to continued instability.

Irrumabo!  GOP? - Nope. No more. They made their bed, now let them die in it.*
* © Libertas (H/T Glock32)