Saturday, November 08, 2003

At Barron's this weekend is an essay adapted from Jim Rogers' book Adventure Capitalist (see The New Bull Market - subscription required). Jim says that we are entering a new bull marked in commodities.

We now face a classic change in commodities markets. Raw materials supplies and demands are out of whack again, and inventories are down. Commodities will do well for years to come, while stocks, recovering from their recent bubble, will do little. We now see long term double and triple bottoms in commodities even if the world economy slows.

Jim doesn't mention gold in his essay, but gold is a commodity, and gold, like other commodities, is also coming out of a more than twenty year bear market.

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How about that jobs report! Wow, what growth our economy is experiencing! Our friend Mahendra, the astrologer and prophet, says that "[t]here will be no positive impact of Job report on market and US $ in long run, may be positive impact will remian only few hours" (see This week prediction, Friday job report). He doesn't offer an explanation for why his predictions of $400 gold have not yet come to pass.

Friday, November 07, 2003

I'm somewhat confused about all the great economic news we've been reading about lately. I was convinced we were suffering a multi-year economic hangover from the bull market of the late 1990s, and that it would be years before the economy recovered. But according to all the figures, things are booming. Doesn't make any sense. Eventually the U.S. housing market has to crash and bring the whole economy down with it. In the meantime, I lost everything I invested in put options on housing stocks. Yes, don't look here for short term investment advice.

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Wheaton River (AMEX: WHT), following a trend right now in which gold companies are using their high stock prices to make acquisitions, is purchasing a gold project in Brazil for $105 million (only $25 million in cash, the balance in new shares to be issued). (See Wheaton River to Buy Owner of Brazil Gold Project).

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And Newmont Mining (NYSE: NEM) raised $1.02 billion from its stock offering (see Reuters: Newmont raises about $1 bln from equity offering), so they have a big war chest with which to buy stuff if they so choose.

Thursday, November 06, 2003

An article from Business Day speculates that the South African Reseve Bank will cut interest rates again next month (see allAfrica.com: South Africa: Reserve Bank Upbeat On Inflation, Growth). This may help lower the rand price, which would be welcome news for South African mining companies.

Wednesday, November 05, 2003

The exchange traded gold fund coming to the U.S. in 2004 could absorb over three million ounces of gold, according to Steve Matthews of Tudor Investment Corporation (see Mineweb: High hopes for US gold ETF).

The coming ETF is definitely a bullish sign for gold.

Gold Fields has also rasied some more money with a new share placement, to the tune of $195 million (see Dow Jones: Gold Fields Raises $195 Million Through Private Placement).

Seems that companies want to take advantage of the high stock prices right now to grab a hold of some cash.

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Barry Davison, chairman of Anglo American Platinum and also president of the South African Chamber of Mines, is once again urging S.A. President Thabo Mbeki to do something about the strong rand (see Mineweb: Chamber steps up rand assault).

“We very much look forward to the fixing of a date to pursue these discussions, and I can assure the President of a creative and productive approach,� Davison said. “It is imperative that we all fully understand that there are now sectors of our industry that are simply unable to cope.�

Tuesday, November 04, 2003

Newmont Mining (NYSE: NEM) announced that it will be offering 20 million shares to the public. With the share price at $43.31, that's $866 million dollars. Reuters quotes an unnamed mining analyst who says that "the mining giant could well be readying to pounce on a peer, despite Newmont's public statements recently that it has its hands full with its own development projects." (See Newmont to raise $1 bln, acquisition rumors fly .)

The entire marketcap of Durban Roodepoort Deep is only $491.5 million. I could only hope...

The case against Brett Kebble, the son of Roger Kebble, continues in South Africa. The court refused to dismiss the charges against him. Kebble says that the charges against him are part of a conspiracy by National Director of Public Prosecutions, Bulelani Ngcuka, and empowerment businessman Mzi Khumalo. (See Kebble to appeal new judgement.)

I'm not really sure who I believe.

Monday, November 03, 2003

Thom Calandra's Stockwatch column at CBS Marketwatch has some interesting quotes about gold from the New Orleans counter-trend conference (see Follow these lines from New Orleans). For example:

"Gold and gold stocks are very thin markets," said Adrian Day, a Maryland asset manager and newsletter writer who specializes in precious metals and in alternative investments. ... "The broad market right now is not interested in gold, even with the gains the metals equities have had."

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Today was a pretty awful day for gold. As you know, I only mention daily stock price movements when they are really big. According to Reuters, the reasons for the falling gold price include (1) the better than expected Institue of Supply Management's October manufacturing conditions index; and (2) September U.S. construction spending surged 1.3 percent in September to a record level (looks like a big bubble to me) (see COMEX gold drops 2 percent on hope for US recovery).

To add further pain to those who invest in South African gold mining stocks, there was no corresponding two percent decrease in the Rand.

If you like to read articles with fancy price charts, check out Brian Blooms contribution to the Gold Eagle (The US$ Riddle).

Brian says the charts say that gold could go to $524/oz, but he also says that this prognostication conflicts with his US$ chart, so it's a big riddle.

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