US$1000 gold - fanbloodytastic!
Well sort of.... South Africans have always had an affinity with gold and when it starts hitting records, the gold bugs start jabbering.
Considering that the mining industry in general is down in the doldrums, a surging gold price may help to stave off some of the unemployment we could be facing in the next few months
Yesterday gold hit US$1007 an ounce before retreating to US$993 in US trade... There has also been a bit of a decoupling with the rand weakening while the gold price is going up which is contrary to recent history where the rand has strengthened when gold has gone up.
While it is great for the gold miners - As we've warned before on this blog - when gold spikes it has tended to pre-empt further equity market sell-offs... gonna be interesting to see what happens here and how the gold shares end up reacting.
Showing posts with label gold shares. Show all posts
Showing posts with label gold shares. Show all posts
Saturday, February 21, 2009
Monday, November 24, 2008
Gold shares fly
I'm sorry but somebody has to explain these markets to me and why a two-day record breaking rally on the Dow is all that exciting??
Locally SA markets took off like a bat outta hell with the Gold index adding some 17%.
The gold price rallied nicely on Friday and added a few more dollars today.
On the SA market the unhedged producers such as Harmony Gold (22%) and Gold Fields (21%) had a very pleasant day. The Newgold ETF also made some nice gains but nowhere near as spectacular....
In the bigger picture, the gold index isn't a particular heavyweight (but we did touch on it in a recent post), but I think South Africans just have this affinity with Gold...
But scrape beneath the surface and the safe haven metal is the one flying and getting everyone all worked up in the last 72 hours. The reality is that the market is on the move because the US government has agreed to bail out another financial services firm....
These are the headlines on Bloomberg to prove my point:
- Citigroup Gets $306 Billion Shield From Losses, Capital After Stock Dive
- Home Resales in U.S. Fall as Foreclosures Push Prices Down Most on Record
- BlackRock Fires Four Managers, Six Analysts in First Cuts in Its History
- Fed Must Speed Aid to Auto Credit Units, Schumer Says
- AIG Auto Unit to Drop Damaged Brand to Help Sale
- New York May Lose 225,000 Jobs, Comptroller Says
- Obama Vows Bold Moves to Avoid Millions of Lost Jobs
And this is grounds for a rebound??
Two solid days of gains is pretty hard to disagree with but I still maintain that you're buying into a sucker rally in the short term.....
With the day belonging to Harmony, I thought it only appropriate to post a picture of their Doornkop operations to brighten the blog up a bit....
Friday, November 21, 2008
Gold and (SPlat)inum
After my atrocious call on Impala Platinum as a screaming buy at R180, I’ve tended to stay away from commodity stocks.
Having said that, there’s an interesting thing that I have been watching with half an eye – the gold price is rapidly sneaking up on the platinum price – something that would have sounded completely unrealistic a few months back when platinum was at nearly 2000 dollars an ounce.
This morning, gold was within 31 dollars of platinum. Both metals have moved up a bit on European trade.
Currently gold is trading at 756.6 dollars (up 12 from yesterday) and platinum is trading at 806 (up 37).
The Gold Exchange Traded Fund (ETF) – GLD – is showing some real strength since September – while most other asset classes are taking stick, the Gold ETF has added value and I don’t think its finished yet either.
The ETF has climbed from around R60 to around R78 which is a pretty healthy return in these tough times. The Gold price itself seems to have established a base at around US$720 and is gaining momentum, the more apparent the trouble in the global economy becomes and the stronger the dollar goes – the better the return on the ETF becomes.
Can’t say whether it will continue to offer good returns for investors but I have added a few to my portfolio in recent months as a form of capital protection.
Having said that, there’s an interesting thing that I have been watching with half an eye – the gold price is rapidly sneaking up on the platinum price – something that would have sounded completely unrealistic a few months back when platinum was at nearly 2000 dollars an ounce.
This morning, gold was within 31 dollars of platinum. Both metals have moved up a bit on European trade.
Currently gold is trading at 756.6 dollars (up 12 from yesterday) and platinum is trading at 806 (up 37).
The Gold Exchange Traded Fund (ETF) – GLD – is showing some real strength since September – while most other asset classes are taking stick, the Gold ETF has added value and I don’t think its finished yet either.
The ETF has climbed from around R60 to around R78 which is a pretty healthy return in these tough times. The Gold price itself seems to have established a base at around US$720 and is gaining momentum, the more apparent the trouble in the global economy becomes and the stronger the dollar goes – the better the return on the ETF becomes.
Can’t say whether it will continue to offer good returns for investors but I have added a few to my portfolio in recent months as a form of capital protection.
Monday, September 29, 2008
Wow!
Wow! The Dow Jones Industrial Average sank 770.59 points (6.92%) yesterday as the US congress failed to approve the terms for the proposed US$700bn bailout that was supposed to save sinking financial markets.
The tech heavy Nasdaq went down 199.61 points (9.14%). Unless a miracle happens today, we're likely to get trashed.
Interestingly though - the Rand is slipping quite drastically and is now trading at around R8.33 to the US dollar.
I'll be he honest - I don't think we have even begun to see the real moves in the Rand / Dollar rate.
The question though is going to be twofold:
- What are our resources going to do with the weaker Rand? (Will the Rand buffer boost them or will they just keep being sold down)
- When the hell are these commodities supposed to bounce?!
Commodities such as base and precious metals were supposed to bounce on the back of increased demand from China following the Olympics. But this doesn't seem to be the case OR the
There is a palpable excitement building around Gold shares / the gold price at the moment and this failed bailout may just be the tonic that is needed to light some serious fires in the precious metals markets.
Gold is now above the psychological barrier of US$900 an ounce. A sliding Rand and a rising gold price is fuel for a run on these shares which creates some great opportunities for traders.
I maintain my exposure to the precious metals / Rand Hedge market through a small call position on Impala Platinum. For the rest of the market it still looks pretty grim.
The tech heavy Nasdaq went down 199.61 points (9.14%). Unless a miracle happens today, we're likely to get trashed.
Interestingly though - the Rand is slipping quite drastically and is now trading at around R8.33 to the US dollar.
I'll be he honest - I don't think we have even begun to see the real moves in the Rand / Dollar rate.
The question though is going to be twofold:
- What are our resources going to do with the weaker Rand? (Will the Rand buffer boost them or will they just keep being sold down)
- When the hell are these commodities supposed to bounce?!
Commodities such as base and precious metals were supposed to bounce on the back of increased demand from China following the Olympics. But this doesn't seem to be the case OR the
There is a palpable excitement building around Gold shares / the gold price at the moment and this failed bailout may just be the tonic that is needed to light some serious fires in the precious metals markets.
Gold is now above the psychological barrier of US$900 an ounce. A sliding Rand and a rising gold price is fuel for a run on these shares which creates some great opportunities for traders.
I maintain my exposure to the precious metals / Rand Hedge market through a small call position on Impala Platinum. For the rest of the market it still looks pretty grim.
Wednesday, September 17, 2008
Rand to be hit?
Does anyone else get the schnarkies that the Rand is about to take an almighty klap??
I've been watching the action in the US and locally and suddenly in the last few minutes Gold has rocketed some 50 odd dollars and the gold shares are on a mission.
Harmony, Gold Fields and AngloGold Ashanti are up in excess of 10% and gold doesn't look like its planning to stop.
In between this the Rand has slipped to R8.22 to the US dollar...
This is great for my Impala shares and for my dollar earnings but will play absolute havoc with the local South African economy (Inflation and debt issues will continue to rise).
I just get the horrible feeling we're about to see a huge selloff of emerging market currencies as people pull their money back into their home balance sheets.
I think I will just keep patting my IMP on the head for the moment... Time for these things to fly....
I've been watching the action in the US and locally and suddenly in the last few minutes Gold has rocketed some 50 odd dollars and the gold shares are on a mission.
Harmony, Gold Fields and AngloGold Ashanti are up in excess of 10% and gold doesn't look like its planning to stop.
In between this the Rand has slipped to R8.22 to the US dollar...
This is great for my Impala shares and for my dollar earnings but will play absolute havoc with the local South African economy (Inflation and debt issues will continue to rise).
I just get the horrible feeling we're about to see a huge selloff of emerging market currencies as people pull their money back into their home balance sheets.
I think I will just keep patting my IMP on the head for the moment... Time for these things to fly....
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