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Aussie gold output slumps

September 1, 2008

 

Gold production in Australia, the world's third-largest producer, slumped 13% in the June quarter as rising production costs constrained output from mines, Surbiton Associates Pty said.

 

Output from mines including those owned by Newmont Mining and Newcrest Mining in the three months ended June 30 was 55 metric tons, 12% less than in the year ago period, Melbourne-based research group said in an e-mailed statement.

 

Surging prices of raw materials, fuel and labor are raising costs for Australian mining companies, curbing expansion plans and curtailing new production. Australian output for the full year dropped 7% to its lowest in 19 years, Surbiton said.

 

''Clearly, higher energy costs have contributed to the significant cost increase,'' said Sandra Close, a director of Surbiton Associates. ''While you can't draw too many conclusions from just one quarter's figures, there is cause for concern. Two of the gold sector's real challenges are cost containment and exploration spending.''

http://business.theage.com.au/business/aus...80901-46i3.html

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THIS BIG GAP DOWN in Gold and Oil ...

 

May be exactly what is needed to put in a low.

 

I wasnt happy with the last low in Oil, and said it needed to be retested. This is it!

And so far, Volume looks lighter too

 

Remember this?

003kb0.png

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THE FACT that so few are willing to CALL A BOTTOM here,

 

is actually a bullish sign.

Too many saw the low at $850, and then again at $800

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THE FACT that so few are willing to CALL A BOTTOM here,

 

is actually a bullish sign.

Too many saw the low at $850, and then again at $800

 

Wasn't there some murmurings out of OPEC that they would likely defend $100 a barrel with supply cutbacks? If so, any spike low below that could be short lived indeed.. that should help put a floor on gold prices, you'd hope, but as mental and irrational as the markets are right now, nothing would surprise me anymore :wacko:

 

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Me too, I got my second 1 oz Kruger yesterday morning.

 

Bloke before me just picked up a couple of large gold bars!!! I felt a little inadequate when the lady behind the counter asked how much gold I wanted.

:lol:

At least you own more gold than most people.

 

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I like this chart

aa1ap0.gif

 

And this one even better

XAU:

http://bigcharts.marketwatch.com/charts/bi...&mocktick=1

 

If the earlier low holds, I think we have exactly the set-up needed to make a Low here

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........ but as mental and irrational as the markets are right now, nothing would surprise me anymore :wacko:

 

This got me thinking. Then I came across this: Irrational emotions? Depends which analyst you ask

 

I won't cut and paste it as it's a bit OT to this thread, but it raises a few interesting points IMHO. Might be worth a thread?

 

 

 

 

 

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Silver at $12.83 ... blimey. Very tempting, even with the pound on the floor.

 

 

I need help. I loaded up on LSIL (leveraged silver) at around $32 a few months ago - curently at 17ish.

I am tempted to not monitor movements for 3 months and look again in December - this is too much to cope with. Anyone else had enough of this?

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I need help. I loaded up on LSIL (leveraged silver) at around $32 a few months ago - curently at 17ish.

I am tempted to not monitor movements for 3 months and look again in December - this is too much to cope with. Anyone else had enough of this?

 

You are a sucker for punishment posting that here! :P

 

Most are down (edit: over the last couple of months), but if there's one thing that cheers you up when you are down, it is finding someone who is more down ;)

 

Here's the advice: this is a buying op, and if you gear, you deserve all you get.

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I need help. I loaded up on LSIL (leveraged silver) at around $32 a few months ago - curently at 17ish.

I am tempted to not monitor movements for 3 months and look again in December - this is too much to cope with. Anyone else had enough of this?

Commiserations! :( I can appreciate your pain (depending on what "loaded up" means to you - hopefully you've not lost the value of a house)...

 

Today's action seems quite positive today... but I'd invite others with more experience to provide their input. Bubb and Cuthbert in particular - is this the bottom you were looking for?

 

As an aside, I listened to last October's CWR on the train home tonight.... some of Paul Van Eeden's comments got me spooked... paraphrasing: "Whilst governments and central banks are using inflation to avoid recession, I'll hold Gold. But if this changes, and efforts to avoid recession begin to look like they're not working, it will be time to reconsider" :blink:

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re-taking $800 was certainly positive. The peformance by gold from the lows of the day showed some strength.

 

I guess. Bearing in mind it only breached $800 a few hours ago, and started the day at over $810, it seems a bit of a tiny "victory". If $800 wasn't a big round number, I don't thing anyone would see the day's action as particularly positive.

 

 

 

 

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Seems to me that gold is falling 0.5% for every 1% drop in oil. Not too long ago it was 1:1 or even higher as a ratio. So that suggests gold is 'cheap' compared to oil

 

I'm expecting oil to drop more, with some nice round number like 100 or 90 to act as a floor (that's where people place their buy orders), with a possible drop to 80 if major global slowdown materialises next year.

 

So a crude extrapolation from the above would put golds bottom at the low 700s. But that assuming the change ratio of 1:2 holds, which is unlikely and more probably going to decrease. Plus for those not buying/selling in dollars, any drop may be reduced by a weakening of their currency (e.g., sterling).

 

Bottom line, I think we UK residents are within 5% or so of the absolute bottom for gold in a worst case scenario. In the best case scenario, oil will hold in the 90-100 range, and so this could be a very good time to buy before the pound fall further.

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I need help. I loaded up on LSIL (leveraged silver) at around $32 a few months ago - curently at 17ish.

I am tempted to not monitor movements for 3 months and look again in December - this is too much to cope with. Anyone else had enough of this?

 

I'm seriously tempted to sell my BV position while about even, as I'm worried about the talk of $650 where I'd be at a loss. Maybe some physical too. I thought this time of year was positive for gold so I might wait a while and see.

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Seems to me that gold is falling 0.5% for every 1% drop in oil. Not too long ago it was 1:1 or even higher as a ratio. So that suggests gold is 'cheap' compared to oil

 

I'm expecting oil to drop more, with some nice round number like 100 or 90 to act as a floor (that's where people place their buy orders), with a possible drop to 80 if major global slowdown materialises next year.

 

So a crude extrapolation from the above would put golds bottom at the low 700s. But that assuming the change ratio of 1:2 holds, which is unlikely and more probably going to decrease. Plus for those not buying/selling in dollars, any drop may be reduced by a weakening of their currency (e.g., sterling).

 

Bottom line, I think we UK residents are within 5% or so of the absolute bottom for gold in a worst case scenario. In the best case scenario, oil will hold in the 90-100 range, and so this could be a very good time to buy before the pound fall further.

 

So why is it dropping now? And what will reverse that trend? I can see physical demand from jewelers, for example, putting in a floor, but why should it then shoot up and recoup all the recent losses and then some?

 

One logical explanation for the falls in gold (and falls in pretty well everything else) is a somewhat "disorderly deleveraging", i.e. a rush to cash from leveraged positions. What is wrong with this explanation, and, if "gold is different", why is behaving the same as everything else, in bad times as well as good?

 

 

 

 

 

 

 

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I need help. I loaded up on LSIL (leveraged silver) at around $32 a few months ago - curently at 17ish.

I am tempted to not monitor movements for 3 months and look again in December - this is too much to cope with. Anyone else had enough of this?

 

 

I took a small punt on LSIL a few months ago as well. Just be thankful that its not spreadbetting and you're limited to losing your initial investment only. I can't resist keeping an eye on the market though and since I have lost a lot of my paper gains in PMs and PM shares in the last few months (been in for 2 years now), my main concern is whether this bull is over, or at least is taking a pause which may last longer than my medium term horizon.

 

At risk of attracting contemptuous reactions, I'm worried that a lot of gold investors seem to be trying to turn bad news into good to justify their holdings / positions. I hope I am wrong to be deeply worried, and this is just a correction in a long term bull (which I admit common sense indicates it is), but while they're the best indicator of the future, past patterns are just that (obviously). I have a sizeable holding and it isn't looking too good from my perspective, fundamentals or no.

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When Sinclair shuts down the phone lines, the bottom must be close one more time. :)

Dear CIGAs,

 

Due to our readership increase and market conditions, the number of telephone inquiries we are receiving daily have reached unmanageable levels. At this time Jim is no longer able to return JSMineset.com related phone calls.

 

Please check back regularly as we are constantly working to address questions about the current market through missives posted here on our homepage. Alternatively, you can subscribe to our RSS feed to notify you when new articles are posted, which is often several times a day.

 

Thank you all for your understanding and continued support!

 

Regards,

Dan Duval

JSMineset Editor

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I need help. I loaded up on LSIL (leveraged silver) at around $32 a few months ago - curently at 17ish.

I am tempted to not monitor movements for 3 months and look again in December - this is too much to cope with. Anyone else had enough of this?

Leveraged paper silver. Wow. :o That's going to be a wild ride. :)

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Gold is down about $20 in the last 24 hrs. In what way is this positive?

With my optimist hat on, gold was UP nearly $20 from 4hrs previous (when I made my original post). :P

 

Look at (in particular) Silver's performance during the all-important New York trading session today:

silverwqi5.gif

 

 

 

 

Incidentally, British Bulls are listing a WAIT on both gold and silver. I know I was somewhat skeptical last week but I have to admit that's quite an impressive performance:

Silver: Our system posted a WAIT today. The previous SELL recommendation was made on 29.08.2008 (4) days ago, when the stock price was 1,365.2500. Since then PHAG has fallen -7.23% .

 

Gold: Our system posted a WAIT today. The previous SELL recommendation was made on 27.08.2008 (6) days ago, when the stock price was 8,226.0000. Since then PHAU has fallen -3.46%.

 

It'll be interesting to see what they make of tomorrow's action.

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With my optimist hat on, gold was UP nearly $20 from 4hrs previous (when I made my original post). :P

 

Look at (in particular) Silver's performance during the all-important New York trading session today:

silverwqi5.gif

 

You're certainly optimistic! :)

 

Looks to my untrained eye that during the NY session, silver dropped, went sideways, then rose back to just below where it started?

 

 

 

 

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