Interesting view. I don't accept the view that rising interest rates means lower gold prices. That is a myth. Check history.
What is this 'golden era of gold' you refer to? No such thing because no other asset can match it over the very long term. Gold has been a trusted store of value for thousands of years.
Ultimately supply and demand will dictate the price and there is NO indication whatsoever that demand for physical gold globally is set to fall. Indeed the opposite is the case. Furthermore global production of gold peaked in 2015 and is set to decline now in successive future years. Supply will reduce - that is guaranteed due to a long term decline in new discoveries over the past 20 years. The new supply required just is not there. That is not a recipe for $500 gold. I accept the paper gold manipulation could continue to have a degree of influence over price but at some point this will be dissolved and true price discovery in a real market will return.
As for the Fed having any cred, are you serious?? And how on earth can you seek to predict a price in 10/15 years time?!! With all due respect that's ridiculous.
Interesting position. I have to confess I am completely on the other side currently. Gold goes through bull/bear markets and those markets tend to be extreme as they are quite rare. Not sure what will change to stop this and I am not sure why you think that the last 50/100 years suggest that the golden era is over.
To me there are several things that suggest your view is not the case:
1. Central banks, particularly those of emerging economies, have been buying gold heavily over the last few years so they clearly believe that there is value to be had 2. Despite what gold bugs would suggest, or those that take everything posted on Zerohedge as gospel, the FED's credibility has been at the highest level for decades and the price of gold has gone up and down in that time. If anything, the FED's credibility is likely to decrease from such lofty levels which can only be beneficial to gold 3. The USD based in gold terms has lost an enormous amount of its value since the gold standard was abandoned and it is difficult to see that this will suddenly reverse in the coming years 4. There is one industry that requires gold - jewellery. If your view is correct then goldies would indeed be wiped out. All of them. Where would the gold for jewellery come from? As such, there needs to be at least a (significant) core of producers which will require at least a level of gold price above $500 I believe.
Gold's usefulness is that it is pretty much useless! As such it does not get consumed which is why it has acted as a currency for many years. At some stage it may be that gold's usefulness as a currency is negated, with suggestions that Bitcoin or something like it may be that thing. If so, this is a very long term possibility and I remain sceptical. In the meantime gold is the thing that people keep on returning to in times of crisis, fuelling future bull/bear markets.
I believe that we are entering a new, potentially spectacular bull market but I also believe that there is a strong possibility that gold could see $1000/oz or even below before we go higher.
The article seems to be getting a bit too upset over a relatively minor matter. I would rather focus on the future performance of the company to be honest. Of course the share price could retrace further but in the long run it would then be a massive buy!
TW (whom I may add I do not always agree with) has a fair point re TB's on market 'purchase' the other day. It wasn't an additional purchase at all as he will now reduce the amount of shares he purchases in the open offer by the same amount!! Presumably because he is a tight git and wanted to pay less for the shares rather than just stump up and show the confidence in himself. Poor show,
Why would it not surprise me if the guy that bought 1m for 6p this morning was the same guy who sold 1m for 4.5p yesterday morning? Do you think he might have the old adage 'buy low, sell high' the wrong way around?
That's the point I'm making though. There's not a great deal of correlation between Pog and SHG at this time. It makes little difference with 75/80% of 2016 production hedged at much lower prices.
Price has bounced in the last day, perhaps to be expected.
Off topic I am very keen on DALR but no one is allowed to buy until I've loaded up fully. Absolutely top drawer project. Great economics. Safe jurisdiction. World class grades. Top institutions backing it. Further exploration upside. At first glance may not appear cheap but there are very good reasons why and this one absolutely is very open to Pog upside - which I expect to see.
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