kernull Posted October 3, 2008 Report Share Posted October 3, 2008 I concur with Ker this is the bottom it may be the bottom, but we will going to test it very good, because we have little volume. i am not expecting it to jump up straight on monday, if it jumps on no volume, it will go back very fast. Link to comment Share on other sites More sharing options...
Joe Posted October 3, 2008 Report Share Posted October 3, 2008 Dealers make a profit on each sale, so why would they turn away customers? There is no need to keep people buying, there are more buyers than sellers now, plain and simple. We keep tossing it back and forth on this site, but maybe the most obvious answers are best. Gold is one of the few practical stores of wealth, in times of financial crisis its value will increase. You didnt answer my question. If they have to pay spot price for the stock. And the next week the spot price drops $100. How can they make a profit. They make a loss. I am not interested in theories but hard facts. Link to comment Share on other sites More sharing options...
G0ldfinger Posted October 3, 2008 Author Report Share Posted October 3, 2008 Very interesting outliers recently. Link to comment Share on other sites More sharing options...
G0ldfinger Posted October 3, 2008 Author Report Share Posted October 3, 2008 A lot of room to go up from here. Link to comment Share on other sites More sharing options...
lardoon Posted October 3, 2008 Report Share Posted October 3, 2008 You didnt answer my question. If they have to pay spot price for the stock. And the next week the spot price drops $100. How can they make a profit. They make a loss. I am not interested in theories but hard facts. They can hedge their stock via the futures market. This is the PRIMARY purpose of any Futures market (which was invented by the Chinese or Japanese for Rice I believe - and I speculate there was not much market manipulation by PPT teams there ). Lets say I am a dealer, today I buy all my stock of 100,000oz in the Cash market at $12. At the same time I would sell the same amount in the Futures market (which should more or less track the spot price) so Short 100,000oz at ~$12 Tomorrow the spot price is $11: my stock has lost $100,000 but my futures contract has gained $100,000 - I havent lost anything. I sell 10,000oz at a 5% premium and this is my profit - no profit or loss on the silver itself as it is hedged. As my stock is now 90,000oz I can reduce my short Futures position by 10,000oz and so on until the stock is finished... I recommend this article from Antal ekete which contains a part on the silver basis which also covers agricultural futures explained as a hedge: http://www.gold-eagle.com/gold_digest_04/fekete050404.html Link to comment Share on other sites More sharing options...
warpig Posted October 3, 2008 Report Share Posted October 3, 2008 I agree with this, hopefully you will post another one of your excellent charts that confirms this is the bottom at some point next week. Thanks for the concern and I look forward to that chart! Keep up the good work. it may be the bottom, but we will going to test it very good, because we have little volume. i am not expecting it to jump up straight on monday, if it jumps on no volume, it will go back very fast. Link to comment Share on other sites More sharing options...
qwerty Posted October 3, 2008 Report Share Posted October 3, 2008 You didnt answer my question. If they have to pay spot price for the stock. And the next week the spot price drops $100. How can they make a profit. They make a loss. I am not interested in theories but hard facts. You forget dealers do not pay spot price they buy around 5% lower. Link to comment Share on other sites More sharing options...
Joe Posted October 3, 2008 Report Share Posted October 3, 2008 They can hedge their stock via the futures market. This is the PRIMARY purpose of any Futures market (which was invented by the Chinese or Japanese for Rice I believe - and I speculate there was not much market manipulation by PPT teams there ). Lets say I am a dealer, today I buy all my stock of 100,000oz in the Cash market at $12. At the same time I would sell the same amount in the Futures market (which should more or less track the spot price) so Short 100,000oz at ~$12 Tomorrow the spot price is $11: my stock has lost $100,000 but my futures contract has gained $100,000 - I havent lost anything. I sell 10,000oz at a 5% premium and this is my profit - no profit or loss on the silver itself as it is hedged. As my stock is now 90,000oz I can reduce my short Futures position by 10,000oz and so on until the stock is finished... I recommend this article from Antal ekete which contains a part on the silver basis which also covers agricultural futures explained as a hedge: http://www.gold-eagle.com/gold_digest_04/fekete050404.html Thanks. That makes a lot more sense but I now have another question. Say the furtures market thinks that the price of gold is going to go down. So they charge a high premium for a short contract. Or no one wants to cover the short postion as they think they will make a loss. Is it possible that the premium for the futures contract can be more than the commission that they can charge on the sale of 10,000oz of gold in your example? Link to comment Share on other sites More sharing options...
Dispassion Posted October 4, 2008 Report Share Posted October 4, 2008 alright, sorry to keep banging on about this but here is a perfect example of what I mean. From Doug Casey's subscriber letter: Always the wrong reasons. Always time to buy on dips. Always an opportunity for great profits (unless you bought in two years ago in which case you'd be looking at 80+% losses). Really don't worry about banging on about it, I for one, would like to see more balance on this forum. I'd hate it to be a cheerleading forum. For me, the primary reason behind the underperformance of gold stocks, has got to be based upon predictions on the longevity of the gold bull. Juniors are underperforming majors which are underperfoming the metal. This would indicate investors are expecting the bull to be short from here. If the outlook changes and the gold bull is confirmed to be strong then I expect to see some very big moves in gold stocks. If anyone has any insight into this then I'm keen to read it too. Link to comment Share on other sites More sharing options...
romans holiday Posted October 4, 2008 Report Share Posted October 4, 2008 I think we need to step back a little and look at what is actually happening here. 1. In the past week physical gold has gone from being in plentiful supply to, at times, practically out of stock. When is the last time that happened? 2. BV has posted a warning that the market is very thin and it is trading on wide margins. When is the last time that happened? 3. Gold as a safe haven is now being discussed in the mainstream media, on chatshows and by people on the bus. When is the last time that happened? 4. Gold spot price this week came close to year high in EURO, and very high in STG. Price for coins is at year high. So what does all this mean? We know that there are a myriad of factors influencing the spot price of gold, and gold is a manipulated commodity. So prices will fluctuate depending on those factors. But one thing is for certain, when gold becomes scarce its value will rise. I think the talk of waiting for the dip to buy is irrelevant, the shortages we saw this week may become the norm. And at the rate that things are unfolding, and with the growing shortages, there is a real risk of being caught out. You have been warned. Good points. But also consider that buyers may be in different circumstances and have different needs. So for example, if someone has no gold I ask them what are they waiting for. If another person had most of their net worth in gold... well, they could happily wait for a possible dip... given the deflationary circumstances at the moment. Link to comment Share on other sites More sharing options...
Andrew McP Posted October 4, 2008 Report Share Posted October 4, 2008 If the outlook changes and the gold bull is confirmed to be strong then I expect to see some very big moves in gold stocks. I've listened to the FS team discuss gold stocks until my ears bleed, but although I see the geared attraction of stocks, especially the right juniors (whatever that means!), my concern is that with gold getting more and more expensive to mine (energy costs, local politics, mining regulations, the easy stuff -- like with oil -- largely mined out, etc.) the people actually doing the work could get squeezed between those costs & complexities and the reluctance of purchasers to pay more for their shiny stuff. Obviously if China suddenly decides to turn their reserves into gold, all bets are off and shares ought to soar with the price of gold. But as a long term bet I worry that imminent peak oil factors with have a highly geared effect on energy-intensive operations like mining. Especially mining for PMs where you have to pan a lot of dirt to find a speck of gold. Of course if oil continues its miraculous fall towards $50 (where's Zapata George and his predictions now? :-) maybe miners will have an easier time of it. But I can't help feeling that the current dip in energy cost is very temporary. Recession or depression, people all over the planet still need their plastic & petrol, and geology is taking its time topping up reserves. Andrew McP Link to comment Share on other sites More sharing options...
ChrisP Posted October 4, 2008 Report Share Posted October 4, 2008 I've calculated the difference between Puplava's Q2 and Q3 holdings. Here is the P&L and the number of shares bought or sold in each at the time of reporting. This isn't very accurate but it's the best I can do from the data. I've removed any companies that he has sold between Q2 and Q3 (e.g. Newmont Mining) and removed any companies he has added to the portfolio during that time. Here is how things are shaping up. Seniors looking healthy, Juniors dragging their knuckles. * P&L is in dollars. Holding P/L Delta Shares -------------------------------------------------------------------------- ABCOURT MINES INC CL B ISIN#CA -1000 0 ABERDEEN ASIA PACIFICINCOME FD -37000 5500 AGNICO EAGLE MINES LTD ISIN#CA 2313000 -17150 ALAMOS GOLD INC ISIN#CA0115271 -17000 2500 ALEXCO RESOURCE CORPCOM ISIN#C -18000 0 ALLIED NEV GOLD CORP 20000 873 ALLSCRIPTS HEALTHCAR ESOLUTION 172000 -2700 ALMADEN MINERALS LTD -36000 2000 ALTIUS MINERALS CORP ISIN#CA02 -748000 -2800 ANDINA MINERALS INC COM ISIN#C 146000 -14500 APACHE CORP -55000 749 APPLIED MATERIALS INC -113000 3167 AQUA AMERICA INC -102000 -19250 AQUILINE RES INC ISIN#CA03839N -136000 -10400 ARCHER DANIELS MIDLAND -358000 2405 AUEX VENTURES INC ISIN#CA05103 -6000 3300 AURELIAN RESOURCES INC ISIN#CA -6870000 80400 AURIZON MINES LTD ISIN#CA05155 13000 -600 AXMIN INC ISIN#CA05461V1022 SE -11000 3000 BAKER HUGHES INC 448000 -3150 BARNWELL INDUSTRIES INC 25000 0 BHP BILLITON LTD SPONADR ISIN# 466000 5375 BP PLC SPONADR REPSNTG ORDSHRS 931000 -6282 CALEDONIA MINING CORPCOM ISIN# 0 0 CAMECO CORP ISIN#CA13321L1085 618000 -50 CANARC RESOURCES CRP ISIN#CA13 -3000 4500 CANDENTE RESOURCES CORP ISIN#C -3000 0 CANPLATS RES CORP ISIN#CA13805 1048000 -185300 CATERPILLAR INC -2170000 25275 CENTRAL FD CDA CL A ISIN#CA153 1191000 -57300 CHESAPEAKE ENERGY CORPORATION -1101000 33960 CHESAPEAKE GOLD CORP ISIN#CA16 281000 -12500 CHEVRON CORP NEW 18000 555 CIMAREX ENERGY CO 49000 400 CISCO SYS INC -74000 814 CLAUDE RES INC ISIN#CA18287310 -13000 2000 CMQ RES INC ISIN#CA12600Q1019 0 0 COEUR D ALENE MINES CORP -27000 0 COLUMBUS GOLD CORP COM ISIN#CA -2000 0 COMMITTEE BAY RES LTD ISIN#CA2 -3000 4000 CONOCOPHILLIPS 781000 438 COPPER RIDGE EXPLORATIONS -1000 0 CORNERSTONE CAP RES INC ISIN#C 0 0 DELL INC 64000 3542 DENISON MINES CORP COM ISIN#CA 37000 2145 DIAMOND OFFSHORE DRILLINGINC 2188000 -10600 DU PONT E I DE NEMOURS& CO 28000 -6100 E REX INC 0 0 ECU SILVER MNG INC ISIN#CA2683 -10000 0 ELDORADO GOLD CORP NEW ISIN#CA 55000 1200 EMGOLD MINING CORP COM ISIN#CA 3000 -16000 ENCANA CORP ISIN#CA2925051047 115000 -500 ENDEAVOUR SILVER CRP ISIN#CA29 -41000 2200 ENERPLUS RES FD TR UNITSER G N -60000 1752 ENSCO INTERNATIONAL INC -13000 9850 ESPERANZA SILVER CRP ISIN#CA29 -260000 -38000 EXETER RESOURCE CORP ISIN#CA30 263000 -54100 EXXON MOBIL CORP 23000 35 FARALLON RESOURCES LTD ISIN#CA 589000 -718100 FIRST MAJESTIC SILVERCORP COM 165000 -29700 FISSION ENERGY CORP -18000 766 FORTUNA MINES INC ISIN#CA34991 22000 -10850 FREEPORT MCMORAN COPPER& GOLD 934000 -2150 FULL METAL MINERALS LTD ISIN#C -55000 3400 GENERAL ELECTRIC CO -974000 -12139 GOLDCORP INC NEW ISIN#CA380956 2848000 -15754 GOLDEN ARROW RES CORPCOM ISIN# -2000 0 GOLDEN STAR RES LTD CDACOM ISI -638000 53500 GOLDRUSH RESOURCES LTD ISIN#CA -3000 0 GREAT BASIN GOLD LTD ISIN#CA39 -35000 4000 GREAT PANTHER RES LTD ISIN#CA3 -38000 -28100 HATHOR EXPL LTD ISIN#CA4190181 -1801000 766200 IAMGOLD CORP ISIN#CA4509131088 -135000 14074 ILLINOIS TOOL WORKS -4000 0 IMPACT SILVER CORP ISIN#CA4525 -8000 0 INTEL CORP -45000 3142 INTERNATIONAL ROYALTYCORP ISIN 130000 -9885 INTREPID MINES LIMITEDSHS ISIN 4000 0 JNR RESOURCES INC -92000 3800 JOHNSON & JOHNSON 403000 -6901 JOY GLOBAL INC -1402000 30300 KIMBER RES INC ISIN#CA49435N10 -162000 18100 MAG SILVER CORP -369000 3000 MARATHON OIL CORP ISIN#US56584 279000 1073 METALLICA RESOURCES INC ISIN#C 25000 800 MINCO GOLD CORP COM ISIN#CA602 -7000 0 MINEFINDERS LTD CORP -362000 -94835 MINERA ANDES INC ISIN#CA602910 -182000 -50800 MIRANDA GOLD CORP ISIN#CA60467 -3000 2800 MOYDOW MINES INTL INC 0 0 NABORS INDUSTRIES LTD(BERMUDA) -489000 408550 NEW GUINEA GOLD CORP ISIN#CA64 1000 0 NEW PAC METALS CORP COM ISIN#C 64000 0 NOBLE CORPORATION SHS ISIN#KYG 383000 -2600 NORTHGATE MINERALS CORPFORMERL -4000 -2500 NUVEEN CALIF MUN MKTOPPORTUNIT -1000 0 NUVEEN CALIF QUALITY INCOMEMUN -1000 0 OREZONE RESOURCES INC ISIN#CA6 -236000 -18800 PALADIN RESOURCES LTDSHS ISIN# 34000 0 PAN AMERICAN SILVER CORP ISIN# 174000 -10100 PENN WEST ENERGY TR TRUNIT ISI 2165000 -38627 PETRO CANADA COM ISIN#CA71644E 17000 1360 PETROLEO BRASILEIRO SAPETROBRA 1437000 -35874 PFIZER INC -308000 -5650 PITCHSTONE EXPLORATIONSLTD COM -6000 -2000 PMI GOLD CORP COM ISIN#CA73015 -2000 0 POWERSHARES DB MULTI SECTORCOM 3963000 -90700 PRECISION DRILLING TRUNIT ISIN 318000 301 QUEST DIAGNOSTICS INC -65000 4700 RADIUS GOLD INC ISIN#CA7504681 -1000 0 RIMFIRE MINERALS CORP ISIN#CA7 -19000 2500 ROYAL GOLD INC 364000 -8770 ROYAL STANDARD MINERALSINC -126000 59203 RUBICON MINERALS CORP ISIN#CA7 -3000 3500 SAMEX MINING CORP -2000 0 SAN JUAN BASIN RTY TRUNIT BEN 422000 1567 SASOL LTD SPONADR 268000 7500 SCHLUMBERGER LTD ISIN#AN806857 1325000 -3275 SHOSHONE SILVER MNG CO -1000 0 SILVER STANDARD RES INC ISIN#C 119000 -27545 SILVER WHEATON CORP COM ISIN#C 31000 -59890 SILVERCORP METALS INC ISIN#CA8 -1899000 -65520 SOHO RESOURCES CORP -4000 0 STRATHMORE MINERALS CORP ISIN# 357000 -112500 SUNOCO INC -460000 4000 SUPERIOR ENERGY SERVICESINC 445000 15350 SYNTROLEUM CORP 62000 3000 TANZANIAN RTY EXPL COM ISIN#CA -41000 500 TERRANE METALS CORP COM ISIN#C -3000 5000 TESORO CORP COM FORMERLYTESORO -960000 18050 TIDEWATER INC 1958000 -21519 TOURNIGAN ENERGY LTD CANADA IS -1000 0 TRANSOCEAN INC NEW SHS ISIN#KY 1327000 -5618 TRINITY INDS INC DEL FRMLYTEXA 1257000 -7101 TYHEE DEVELOPMENT CORP ISIN#CA -2408000 183250 U S GOLD CORP -28000 5650 US GOLD CDN ACQUISITIONCORP SH -4000 0 VALERO ENERGY CORP -114000 -200 VISTA GOLD CORP REORGANIZATION -69000 -38100 X CAL RES LTD -4000 0 XTO ENERGY INC 102000 -267 YAMANA GOLD INC ISIN#CA98462Y1 1645000 -49984 YPF SOCIEDAD ANONIMA SPON ADR 86000 -1400 YUKON NEVADA GOLD CORP ISIN#CA -66000 3910 ZIMMER HLDGS INC -270000 940 Link to comment Share on other sites More sharing options...
electroweak Posted October 4, 2008 Report Share Posted October 4, 2008 lease rate action... Link to comment Share on other sites More sharing options...
Dispassion Posted October 4, 2008 Report Share Posted October 4, 2008 I've listened to the FS team discuss gold stocks until my ears bleed, but although I see the geared attraction of stocks, especially the right juniors (whatever that means!), my concern is that with gold getting more and more expensive to mine (energy costs, local politics, mining regulations, the easy stuff -- like with oil -- largely mined out, etc.) the people actually doing the work could get squeezed between those costs & complexities and the reluctance of purchasers to pay more for their shiny stuff. Obviously if China suddenly decides to turn their reserves into gold, all bets are off and shares ought to soar with the price of gold. But as a long term bet I worry that imminent peak oil factors with have a highly geared effect on energy-intensive operations like mining. Especially mining for PMs where you have to pan a lot of dirt to find a speck of gold. Of course if oil continues its miraculous fall towards $50 (where's Zapata George and his predictions now? :-) maybe miners will have an easier time of it. But I can't help feeling that the current dip in energy cost is very temporary. Recession or depression, people all over the planet still need their plastic & petrol, and geology is taking its time topping up reserves. Andrew McP The neutral energy to product ratio for miners is one that rises with rising product price. The sell off in the HUI has actually coincided with a fall in the oil to gold ratio, so I don't consider energy costs to have been a significant factor here. see: http://stockcharts.com $WTIC:$GOLD and $HUI:$GOLD Link to comment Share on other sites More sharing options...
Dispassion Posted October 4, 2008 Report Share Posted October 4, 2008 lease rate action... This still confuses me. I don't understand who is borrowing gold or who is selling it at the moment it certainly doesn't seem to be the private investor. Link to comment Share on other sites More sharing options...
Bobsta Posted October 4, 2008 Report Share Posted October 4, 2008 On September 22nd Jim Sinclair wrote: Dear Extended Family, Today's events have put two very important criterion in place for the markets that you must be aware of going into January 14, 2011. 1. The dollar has a solid roof above it that now cannot be penetrated. 2. Gold has a solid floor underneath it that now cannot be penetrated. Selling the dollar on strength and buying gold on weakness with attention to what I have taught you has lost 90% of its risk factor. With a solid floor under gold, the gold mining business becomes a more sound investment than it ever has been. That is simple logic and is now fact. I made a comment at the time that Jim hadn't specified exactly where this floor is. Given Sept 22nd was shortly after the shoot up from the 750s, I'd assume he feels it's somewhere above 750. Here's hoping it's Ker's $828. Silver's performance yesterday cheered me up a little. Link to comment Share on other sites More sharing options...
wren Posted October 4, 2008 Report Share Posted October 4, 2008 This still confuses me. I don't understand who is borrowing gold or who is selling it at the moment it certainly doesn't seem to be the private investor. Could the increase in lease rates reflect a serious drop in borrowing demand? And that would presumably reflect a general sentiment that prices are not likely to drop much and maybe go up? Link to comment Share on other sites More sharing options...
wrongmove Posted October 4, 2008 Report Share Posted October 4, 2008 Could the increase in lease rates reflect a serious drop in borrowing demand? Usually, an increase in demand causes an increase in price, not the other way around? Link to comment Share on other sites More sharing options...
wren Posted October 4, 2008 Report Share Posted October 4, 2008 Usually, an increase in demand causes an increase in price, not the other way around? Yes. I was thinking the wrong way round. Does anyone know where to fiind what the actual volumes borrowed are? Link to comment Share on other sites More sharing options...
Bobsta Posted October 4, 2008 Report Share Posted October 4, 2008 Having caught up with the last two or three pages of this thread, I'm left on balance feeling like the PoG is heading south for now. Is that a fair assessment of people's average feelings (assuming one can average feelings! )? Also: British Bulls on Gold. Yesterday's early trading in New York hinted at a bottom to me. The price tried to punch down through $820 and was forced straight back up. Closing at nearly $835 when it'd been as low as $818 gives me some hope. The light volume makes me slightly nervous, but we know the fundamentals are in place. A huge amount of gold's recent "weakness" has been down to a strong dollar - and honestly, how long can that continue?!? Reading around, the general concensus appears to be that the passing of the bailout bill was already priced into the markets - hence the disruption and volatility earlier in the week when it was blocked. So I don't forsee any fallout from it on Monday. British Bulls now have "BUY-IF" alerts for Gold and (significantly, IMO) Silver. I've never traded their signals - but they've been spookily accurate lately. Link to comment Share on other sites More sharing options...
kernull Posted October 5, 2008 Report Share Posted October 5, 2008 here are some guidelines for monday, remember, this is not a secure outlook, it is just an idea and it maybe wrong, always use stops: Link to comment Share on other sites More sharing options...
qwerty Posted October 5, 2008 Report Share Posted October 5, 2008 here are some guidelines for monday, remember, this is not a secure outlook, it is just an idea and it maybe wrong, always use stops: Ker for those not trading gold futures etc how do your greatly appreciated charts look in sterling as most other available charts are $ based? Link to comment Share on other sites More sharing options...
Steve Netwriter Posted October 5, 2008 Report Share Posted October 5, 2008 here are some guidelines for monday, remember, this is not a secure outlook, it is just an idea and it maybe wrong, always use stops: Ker, I think you deserve a few of these for an excellent explanation and the work you've put in doing it. I don't trade Gold, but it's very interesting reading your explanation. No doubt this week will be very interesting. Link to comment Share on other sites More sharing options...
drbubb Posted October 5, 2008 Report Share Posted October 5, 2008 Interesting work, Ker. I also think we are at a key inflection point. To me, the high lease rates, make it better than a 50/50 bet that it will be UP. But it is far from 100% guaranteed. Link to comment Share on other sites More sharing options...
ologhai Posted October 5, 2008 Report Share Posted October 5, 2008 To me, the high lease rates, make it better than a 50/50 bet that it will be UP. But it is far from 100% guaranteed. I thought the phrase was '100% correct, guaranteed'! Link to comment Share on other sites More sharing options...
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