Tag: the gold report

C is for Cash and Catalysts in a Chaotic Market

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The Gold Report: Resource equities have been rejected, beaten up and ignored. Make your case for small- and mid-cap gold stocks.

Jeff Killeen: It's true that investment dollars have been moving out of the resource sector over the last year and gold exploration companies in particular have seen a drastic decline in market value over the last 12 months.

However, the space cannot be ignored. These commodity sectors are cyclical and putting investment dollars to work strategically in the space when equities are at such low valuations makes sense, but patience is required.

"My recommendation is that investors focus on the fundamentals when looking at junior exploration equities."

My recommendation is that investors focus on the fundamentals when looking at junior exploration equities. Does the management team have a proven track record? Does the company's asset or assets have strong grades relative to the proposed extraction method, which can secure healthy margins, even at lower commodity prices? Does the company have balance sheet strength to significantly derisk and advance these projects?

TGR: What gold price are you using in your models? Continue reading "C is for Cash and Catalysts in a Chaotic Market" →

Roger Wiegand Predicts a Brand New World for Gold

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The Gold Report: In early 2012, Roger, you predicted that the price of gold would rise to over $2,000/ounce ($2,000/oz) during the year. But as the overall stock market increased in value, the yellow metal went in the opposite direction. What happened?

Roger Wiegand: Two things happened. First, the last gold peak almost made it. It went to $1,923/oz, and that was a technical and fundamental top. Then it sold down. The other thing that happened is that the U.S. Treasury intentionally sold gold to protect the stock and bond markets. Treasury feared that if gold ran up too high too quickly, people would dump securities en masse.

We are in the seasonal cycle when many markets go sideways. We have seen the selloff at the end of last week. A triple bottom is extremely bullish. The snap back in the price going long could be impressive.

TGR: What factors are keeping gold down in the near term? Continue reading "Roger Wiegand Predicts a Brand New World for Gold" →

Who Killed the Gold Price?

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The Gold Report: On April 15, the gold price plunged about 9%the biggest one-day loss ever for the yellow metal. Many gold investors got "murdered" that day. Has your personal investigation revealed any suspects?

Ian Gordon: I suspect it was akin to what happened in 1999. The then-governor of the Bank of England, Edward George, supposedly said that "any further rise in the gold price would take down one or more trading houses." He said the rising price of gold was curtailed through the work of the Federal Reserve and the Bank of England. It appears that a bullion bank was caught offside on the short side and they had to take the price of gold down quite dramatically to allow it to cover.

I think something similar happened in April. I think it was manipulated to the downside. Goldman, Sachs Co. encouraged its clients to short sell gold two days before this occurred.

TGR: Could it have just been an error?

Continue reading "Who Killed the Gold Price?" →

In Precious Metals, Cash Flow Is King

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The Gold Report: Many believe that the price of gold represents a market referendum on the value of paper money and the health of the world economy. Do you agree?

Jay Taylor: Yes, I do. Gold rose from the mid-$200s/ounce (mid-$200/oz) in 2002 to as high as $1,900/oz. That clearly suggests that things are not all right in the global economy. Politicians like to create the illusion that they can create something out of nothing and give it to people in exchange for votes. Gold gets in the way of that falsehood politicians wish to use to deceive voters for their own gain and the gain of those who fund their election campaigns.

TGR: Gold has fallen from $1,900/oz to below $1,400/oz. Some people say this proves the bubble has burst. Continue reading "In Precious Metals, Cash Flow Is King" →

Physical Gold and Paper Gold Battling for Supremacy

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The Gold Report: In your latest newsletter, you advocate that gold investors pay close attention to the Federal Reserve meeting taking place on June 18. What are you looking for out of that meeting?

Brien Lundin: The main driver for gold right now is quantitative easing (QE). An investor trying to figure out where the gold market is heading in the near to intermediate term needs to focus on QE. Investors should look for clues to the future prospects of the Fed's QE programthat's what's going to drive gold in the short and intermediate term. The question really is: To QE or not to QE? The next Fed meeting will be a prime indicator of that, and the one after that and the one after that.

My general view is that the reports of a resurgent U.S. economy are way ahead of themselves and some data points are indicating that the recovery is not that robust and may even be in danger. The jobs numbers will shed some light on this. If such a scenario develops, then the snap back for gold would be pretty dramatic. A weakening U.S. economy would be bullish for gold because it's bullish for continued QE, and that's the real factor for gold going forward.

TGR: Besides the jobs numbers and the Fed meeting minutes, what indicators are you watching to get some insight into whether the economy really is improving? Continue reading "Physical Gold and Paper Gold Battling for Supremacy" →