Gold and Silver Blog

Mahendra predicts that gold will trade above $400 today (he missed that) or Monday. He's been predicting $400 for a long time.

He also says his new book of prophecies for 2004 will be printed soon. He really ought to give me a free copy considering how much publicity I give him.

(See Get ready for gold above $400 and my book.)

At Mineweb, an article with more detail about Gold Fields' St. Ives operation in Australia (see Gold Fields commits A$125m to Oz gold).

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More stuff blowing up again in the world this morning, this time in Iraq, but so far no effect on the gold price.

Gold continues to flirt with $400, but I don't have anything else to say about that right now. Maybe the terrorist bombings in Turkey this morning will help the Gold price today.

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Gold Fields reports good news at its St Ives mine in Australia (see Dow Jones: Gold Fields/Expansion: Mine Life Could Be 9 Years). Gold Fields will build a new ore processing facility to increase production from 510,000 oz/year to 600,000 oz/year. Gold Fields also says that it hopes to eventually produce 750,000 oz/year at St Ives, and that recent drilling suggests tha the mine life could increase from 6 years to 9 years.

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Article at Yahoo/Dow Jones Newswire about how the strong rand is hurting South African gold miners (see FOCUS: South Africa Miners Losing Out On Gold Price Rush).

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The Australian dollar is also at 6 hear highs, and Australian mining companies are having the same problems as the ones in South Africa (see The Age: Higher $A casts shadow over glittering gold). The Australian Dollar has risen 28% against the U.S. Dollar since the beginning of the year.

$400

CNN.com: Gold soars above $400

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Individual investors in China traded gold today for the first time since 1949 (see China Daily: Bank of China starts gold trading ). The hope for gold investors is that demand for gold from Chinese investors will help push up the price.

An editorial in Business Report is highly critical of Gold Fields' involvement in Tibet (see Gold Fields should pull out of Tibet). The editorial says that the mining of gold in Tibet will harm the environment, may involve forced or prison labor, and will be done without the genuine consent of the Tibetan people whose right to self-determination is continuously violated by the Chinese.

We came within 10 cents of $400, but gold retreated because funds "got antsy" and "bailed out" (see Reuters: COMEX gold retreats, $400 toyed with, not tasted ). Maybe next time.

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The prophet and astrologer Mahendra, always the gold bull, predicts that a gold bull run could start tomorrow (see Gold prediction). "Why I am saying tomorrow because I would like Mars to join Jupiter in this rally. So lets wait until tomorrow to see mood of Mars because Mars can force gold to rise 8% continuous."

Let's hope that Mahendra is right this time.

They were talking about gold all morning on Wakeup Call on CNBC, and this is pretty bullish for gold prices. If Joe Stupid Investor ever got it into his head that gold stocks were as good of an investment as tech stocks, there would be an an incredible surge in gold and gold stock prices like we've never seen before.

I refer you to my other blog, The Calico Cat, for commentary on an interesting investment opportunity in nuclear power that may be available next year.

Bill Fleckenstein and the post-bubble economy

In his weekly Contrarian Chronicles column at MSN, Bill Fleckenstein doesn't say anything about gold, but he is bearish, as usual, on the economy as a whole.

Bill disagrees with the post-bubble loose money policy. He writes:

At this point in time, I find it premature to pass judgment on the post-bubble actions of the Fed and the government. We have NOT had a Great Depression like in the 1930s. At least not yet. If that has been avoided, then they did a great job.

Greenspan was clearly wrong to allow the economy to become so overheated in the two years prior to the final peak in the winter of 2000.

It remains to be seen if economic disaster is in the future, or just a decade of lackluster economic performance. In any event, I say it's a bad time to own non commodity oriented stocks. Sell those overpriced tech stocks while you still can.

Is gold money?

At Mineweb, today, there's an opinion article penned by Philip M. Spicer, chairman of the Central Gold Fund of China (see Corruption & Gold).

Philip writes:

Well, I have to disagree with that assessment. The currency I had a week ago still buys stuff today. The value has been stored for at least a week. In fact, if you place the currency into a money market fund, the interest is approximately the same as the rate of inflation, and the value is maintained indefinitely. On the other hand, there's no guarantee that gold will store value any better. The price could go down you know. Yes, I'm bullish on gold, but it would be dishonest to suggest that holding gold poses zero risks.

From my perspective, it doesn't really matter to me whether gold or silver is money, any more than whether oil or natural gas is money. I feel I can make money by investing in stocks of companies that produce all of these commodities.