Saturday, November 15, 2003

There doesn’t seem to be anything about gold in this weekend’s Barron’s. But interesting reading is to be found in the Up and Down Wall Street (subscription required to view link) column, in which Randall Forsyth sees consumer spending fizzling out. He points out that mortgage refinancing is down 80% since the summer, and he also writes:

Another model using what [HSBC economist Ian] Morris calls "real household purchasing power," consisting of real disposable income and real liquid borrowings, also points to an imminent sharp deceleration that poses a challenge for policy makers next year. That's because so many consumers are tapped out. The ratio of debt service to disposable income has set a record, even with low interest rates and tax cuts, according to the Fed. Personal bankruptcies rose 7.8% in the 12 months to Sept. 30, hitting a record 1.625 million. Moreover, 42% of Americans who took 401(k) distributions last year didn't roll them over but spent them, incurring taxes and penalties in the process.

On Wednesday, the trading day before the Avgold merger with Harmony (NYSE: HMY) was announced, Avgold rose 9.2% on unusually heavy volume. This is being investigated by the JSE. (See JSE To Probe Avgold Share Trading .)

Wednesday was an especially good day for ALL gold stocks, however, so it's really hard to say that there were any shenanigans going on just because Avgold's stock was up. Durban Roodepoort Deep (NASDAQ: DROOY) was up 11.6% on Wednesday in trading on the NASDAQ.

Thursday, November 13, 2003

Harmony Merges

I don't own any Harmony (NYSE: HMY), but this is pretty big news for those who do, or for South African gold mining in general (see Reuters: S.Africans create major black-owned mining firm). Harmony is merging with two other companies, Anglovaal Mining Limited and African Rainbow Minerals.

At this moment I dont' understand the full implications of the merger for Harmony shareholders.

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Thom Calandra at CBS Marketwatch says that Bema Gold (NYSE: BGO) is likely to be bought out (see Bema hits sweet spot).

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And finally, yesterday was a GREAT day for gold and silver, both the metals and the mining stocks! Wow, I'd love to see a few more days like that. A weakening dollar and fears of terrorism are said to be the reason for the rising gold price (see CNN: Gold surges toward $400).

Tuesday, November 11, 2003

Gold Fields (NYSE: GFI) is seeking to step up its investments in China. Gold fields would like to acquire a majority stake and some operational control over one or more gold mining projects there. (See Business Report: Gold Fields to build up its interests in China.)

Monday, November 10, 2003

De-hedging slowed in the previous quarter. In the quarter ending September 2003, gold producers reduced their hedge positions by 2.3 million ounces, which is a 42.5% drop from the quarter ending June 2003, when producers bought back 4 million ounces. (See Mineweb: Dehedging slows, raises gold fears.)

My thought here is that this is a natural reaction to the rising gold price. Producers are reluctant to de-hedge when gold is high, even though they may have remorse about not de-hedging more when they had the opportunity at lower prices.

Sunday, November 09, 2003

In India, non-oil imports are up 28% in the April to June 2003 period as compared to the same period in 2002, but a good chunk of this increase is likely accounted for by increases in gold and silver being imported. Gold and silver imports are up 99.9% for that period. (See Gold-plated import surge clouds recovery hopes.)

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Northern Dynasty Minerals (OTCBB:NDMLF, TSXV:NDM ) reports continuing good drilling news from its Pebble project in Alaska (see press release). According to Anchorage Daily News, the mine is thought to contain 13 million ounces of gold and 6.8 billion pounds of copper. And because the project will be open-pit mine, mining costs should be low. (See PEBBLE: Tests near Illiamna yield more minerals than expected.)

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