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Thursday, November 27, 2003

Gold was supposedly up yesterday on scares that there was a strange smell in the NY Subways, but I find this explanation highly unlikely because I was riding the NY Subways yesterday, and no one knew about this smell. It certainly wasn't news in New York City.

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News from South Africa is that Gold Fields (NYSE: GFI) announced a ground breaking empowerment deal. "Mvela Gold, a wholly-owned subsidiary of Mvela Resources, will effectively acquire a 15% beneficial interest in the South African gold mining assets of Gold Fields namely the world-class Beatrix, Driefontein and Kloof mines for a cash consideration of R4 139 million." (See Gold Fields and Mvela Announce Details of Structure....)

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Trying do do anything on the internet is proving quite a burden right now because I'm having to work with a dialup connection. I guess that high speed internet access is now another necessity of life, much like cell phones and cable TV. Today we have all these expenses that our parents never had.


# posted by Half Sigma : 12:34 PM

Tuesday, November 25, 2003

In an article at the Motley Fool about gold, gold investing is discouraged with the following parapgraph:

From Jeremy Siegel's seminal book, Stocks For the Long Run, here's how a single dollar invested in various vehicles would have fared from 1802 to 2001 (yes, just about 200 years!): stocks, $600,000; bonds, $1,000; bills, $300; gold, $0.98. (These numbers are adjusted for inflation.) Gold's results are not too pretty.

See (After the Gold Rush?.) What the article fails to point out is that the history of the stock market tells us that investing in stocks when they are overvalued, like they are now, results in losses over the following decade. At the same time, investing in gold when it's undervalued is a good investment. Gold was over $800/oz in 1980, and that's not inflation adjusted dollars. Nothing is preventing gold from having a run into the four figures.

The Motley Fool is the same place that hyped tech stocks when the NASDAQ was at its peak. Their advice is not to be listened to.

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There are a lot of great articles up at Mineweb about the San Francisco gold conference, but unfortunately I don't have time to review them now. And because I am going to be travelling during the Thanksgiving holiday weekend (beginning tonight), posting to this blog will be sporadic through Sunday. Sorry about that.


# posted by Half Sigma : 6:56 AM

Monday, November 24, 2003

Leonard Kaplan has some negative comments about silver in his most recent Gold Market Commentary posted today (see Quasimodos Article). He says:

One comment regarding silver and then on to the Commitment of Traders reports. Silver warehouse stocks at the Comex have risen sharply over the last two months, now approaching 120 million ounces, even as the price has risen. This bears evidence that the rally we are seeing in this market is ?paper? driven, not physically oriented. It can not be a good sign that physical stocks are rising even as prices rise.


# posted by Half Sigma : 7:03 AM

Sunday, November 23, 2003

Hedging no longer creates shareholder value and over the next decade, Barrick (NYSE: ABX) won't do any more hedging, Chairman Peter Munk said at a gold conference in London.

CBS Marketwatch: Gold ends up on Barrick news, but down $2 for the week

Interesting news indeed. Barrick is blamed in goldbug circles for being involved in a conspiracy to keep down the price of gold, so it's surprising to hear them saying things that would cause the price of gold to increase.

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There was not much gold news in Barron's this weekend, except for a mention about the Barick announcement:

GOLD ROSE AFTER BARRICK GOLD CHIEF Executive Peter Munk said Friday that the company won't hedge production for the next decade. December futures on the Comex division of the New York Mercantile Exchange on Friday rose $2.30 to $396 a troy ounce. Barrick said Munk's remarks were consistent with previously announced plans to reduce the company's hedge book, although Dow Jones Newswires reported he defended Barrick's hedging in a speech to a London gold conference just the day before. Analysts said it's not clear what additional action Barrick might now take.

(See Commodities Corner - subscription required.) Of note in the above quote is the statement that "analysts" are "not clear" about what Barrick is going to do now.


# posted by Half Sigma : 3:10 PM

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