Gold and Silver Blog

This weekend's Barron's features an interview with Warren Buffett. I had hoped that Buffett might have had something to say about silver, because Buffett allegedly owns a big position in silver bullion, but there was nothing about precious metals at all.

* * *

I saw the new $20 for the first time yesterday, it doesn't really look that different than the old $20. It's pretty silly how someone thought that the new bill was part of a conspiracy to outlaw the ownership of gold.

* * *

At Financial Sense there is a contribted article worth reading, Answering A Few Silver Questions by Douglas Kanarowski. Of course it's only one guy's view on the silver market, but what he writes basically explains the reasons why I own a lot of silver mining stocks.

Randgold Resources increased its offer for Ashanti once again (see Randgold Resources Increases Offer For Ashanti). But my guess here is that Randgold isn't going to get it. It's not really an "offer" at all if Ashanti shareholders retain 72.6% of the enlarged business.

An article at CNN/MONEY asks Is gold headed for $400?. Normally I don't post links to silly articles that contain worthless speculation on future gold prices, but in this case the story is that the article is published. More of these articles could create investor interest in gold that would lead to significant demand for gold and gold mining stocks.

* * *

Mineweb has an article up about Durban Roodepoort Deep, DRD's hopes up for December quarter.

* * *

At my other blog, the Calico Cat, I posted Statehood for Washington, D.C.? No thanks.

"South African gold miner Durban Roodepoort Deep (DRD) (DURJ.J) unveiled on Thursday a headline loss per share of 24.4 cents in the three months to end-September versus a profit of 54.2 cents the previous quarter" (see Reuters: UPDATE - S.African DRD sinks to Q1 h'line loss of 24.4 cents).

This bad news should come as no surprise to any readers of the Gold and Silver Blog. DRD is down only 8 cents in Germany right now, so it looks like this was expected by the market as well. Today's price weakness may just be due to the fact that the Rand is stronger again today.

DRD released a long press release explaning how it's reducing costs its North West Operations and expanding into Australasia where operating costs are lower.

* * *

Aaron Task at TheStreet.com writes about how gold and stocks are both up this year (see Gold and Stocks No Longer Are at Odds).

Mahendra Sharma has issued more prophecies today. He claims he accurately predicted weakness in the stock market, but I say he was dead wrong because he predicted a "crash" and all that happened is that the market went down a few points. Mahendra still says that silver will top $6 by the end of 2003 (I sure hope so!) but warns that gold may fall below $368.30, in which case you should not buy any more.

Mahendra says "My prediction on market might make you confuse but soon I will come with clear and final answer."

* * *

If you are following the Ashanti saga, check out the latest article at Mineweb, which reports that on Friday "French bank Societé Générale, the advisers to the Ghanaian government, will submit its recommendation on the best bid" (see Ashanti recommendation by Friday).

* * *

Please check out my latest post at The Calico Cat, Student loan rip-off, where I discuss the cover story at U.S. News and World Reports about student loans.

Canadian company Goldcorp (NYSE:GG, TSX:G) reports its highest earnings ever (see press release).

But Retuers warns us that results at South African gold mining companies will be hurt by higher labor costs (see Labour costs to hurt S.African gold mine results).

Kodak and the future of film is posted at my other blog, The Calico Cat. Because the future of film could have a significant impact on silver prices, I suggest reading it.

I just sold 42% of my position in Pan American Silver (NASDAQ: PAAS) and used all of the proceeds to buy shares of Apex Silver Mines (AMEX: SIL). With Pan American having risen so much recently, and Apex near its one year lows, I figured this was a good time to diversify my silver holdings. Of course, paying the capital gains tax on the sale of Pan American will be painful come tax time.

I think the article at the Motley Fool helped to convince me that Apex is a really good buy right now.

The Wall Street Journal's Heard on the Street column reports that a group of Kodak shareholders wants the company to undo its plans to move away from film into digital technology (see Investors Seek to Rewind Kodak - subscription required to view article).

Their point is basically the exact same point I made when I first heard about the announcement. There is no way that Kodak will be able to compete successfully against the established printer companies like Epson, Canon, and HP. (And by the way, I highly recommend an Epson inkjet printer if you want to print out digital photos.) And Kodak may be able to sell some digital cameras into the low end of the market, but the serious photographers know that Kodak cameras are junk.

Some of Kodak's investors propose the radical plan that Kodak just be content with making money from a shinking film business!

There is speculation that Barrick Gold or Placer Dome might get involved in the bidding for Ashanti Goldfields (see Reuters: Canada gold giants decline comment on Ashanti bid). It's too bad I don't own any Ashanti.

* * *

Holidays in Asia, such as Diwali and Ramadan, are spurring demand for gold. And then there is the Indian wedding season which lasts until March (see Reuters: Asia Gold-High gold demand to light up festivals, holidays).

At the Motley Fool, a website mostly known for its endorsement of internet stocks with sky high PE ratios, we find an endorsement of Apex Silver Mines (AMEX: SIL). "When it all shakes out, the stock, trading near its 52-week low, has the potential for spectacular long-term gains." (See A Silver Opportunity.) The positive plug didn't seem to do anything for the stock price. Up only one cent.

* * *

A week ago I reported that the astrologer and prophet Mahendra Sharma predicted that the stock market would crash either on Friday or today. He seems to have been wrong.

* * *

At my other blog, The Calico Cat, read my post 10,000 is just a number, which is about the Dow Jones Industrial Average's flirtation with 10,000.

With the rand being so strong, South African company Gold Fields (NYSE: GFI) is looking abroad to replace gold reserves (see Business Report - Gold Fields looks abroad as strong rand pushes up costs).

* * *

In his Contrarian Chronicles column from two weeks ago, Bill Fleckenstein announced that he had sold gold. After a week's absence, he's back, with nothing to say about gold, but he does have a lot to say about why you should not be long Intel.

At my Calico Cat blog, I posted an article entitled Higher corporate profits through lower salaries, which continues the themes of an earlier article I wrote about the "jobless recovery" and the "shrinking middle class."

The Australian mining industry is male dominated (see MiningNews.net: Mining industry: sexist or just male dominated?). This isn't really all that surprising. You don't expect to find women working in the mines.

* * *

Harmony Gold is now out of Russia with the sale of its 17% stake of High River Gold (see Mineweb: Harmony out of Russia). This is not to be confused with its sale of Highland Gold two weeks ago. It seems that all these gold mining companies have similar sounding names.

* * *

The Rand was down on Friday, hopefully a trend that will continue (see Business Day: Rand sees JSE surge to year-high ).