Member Info for Daisan

Korg, I follow the chartists rather than the fundamentalists, as I found to my cost that the latter (whose arguments I understand very well) in no way are able to predict the direction of gold! The chartists have generally been looking for a pull back. The COT report is also seen as something of a bible when it comes to predicting the direction of gold - it is rarely wrong (I can't remember a time when it was) and is currently pointing towards prices being smashed in the short term. The flip side to this is that gold is being annoyingly consistent about not losing ground! To quote the analyst (Chris Vermeulen) that you brought up Korg: "Its beginning to feel a lot like greed buying in stocks and metals… As talked about in today’s video and many other times in the past 10 days we are waiting to see if we get a bearish price pattern on gold miners, or a blow off time. Today looks and feels like a blow-off top in gold and miners. We could see price gap up tomorrow or maybe more up for another day or two, but overall I think big selling is just around the corner. My story has not changed, it just that them market always has a way for dragging patterns out longer than you anticipated. The saying is “If the market can’t shake you out, it will wait you out.”"

Whether it is one or many, there has been persistent selling in the background of Shanta for several weeks now. This is one of the few gold miners I actually put a small amount of money in as a 'just in case' the gold price took off. Typically I chose the one that refuses to join the party! Still not convinced about this current gold rally although it does appear remarkably resilient! The COT must be horrendous this week - the commercial short positions must be at record highs. It will be interesting to see when it comes out.

I don't disagree Dibs but it is hardly unique in the gold miners at the moment - as a niche it is way undervalued. However, at the moment I am more looking towards a pull back in the sector driven by the gold price as it has risen too quickly - the move went parabolic which is never a good sign. Currently it is behaving in a very resilient fashion (since Yellen made her speach including NIRP), so defying gravity. I suspect that it will correct in the not too distant future and take some decent miners with it in the short term. I will be looking at producers more than explorers at this time as they will more directly benefit from the rise in gold. Although, that said, I am looking at more leveraged plays on indices rather than individual shares at the moment. Avoids the risks associated with a particular company whilst benefiting from a significant upturn in the sector.

I don't see any evidence that mms are holding this back. In fact, whenever I have read this I have yet to see a case where this was true. The simple fact is that a share will be driven by the buying/selling pressure. A market maker is obliged to make an orderly market in the shares so has to perform some balancing based on their view of the demands. If the buying is overwhelming then the share price will definitely go up. You only have to look at the likes of 88E to see that this is the case. Gold seems to be very resilient at the moment and is pushing against the resistance in the 1260-1270 area (currently just above). If it can move to 1290 it may well pop despite the enormous commercial short positions currently in place (and they must currently be getting bigger given the price action). It is an interesting balance. Pretty much everyone I read has been calling for at least a short/medium term retrace but gold seems to be ignoring them currently! The only thing I would point out is that the gold miners are not currently exhibiting much in the way of momentum or follow through buying (I suspect that this would change if gold blasted higher) which would suggest exhaustion in the short term Still waiting but, as ever, it is difficult to do when the gold price just keeps moving higher!

Are all turning very bearish on gold and gold miners. COT report has freaked a number of them - biggest commercial short position in 7 years. Likelihood is that they will be in the money - they usually are. Seriously tempted now to short the gold miners using DUST. Silver even worse I understand

Dibs61, Thanks for the response. I have had a look around and your assessment seems accurate (as opposed to Timeless who is in dreamland if he thinks they aren't going to raise - their latest report even states they will if their option on GMSI is extended). This is still very early stage and there are a lot of ifs in it. As I have said previously, if gold rises sharply then this is the sort of company that may perform spectacularly, although it is likely to rise somewhat later than the direct beneficiaries (producers). Still, at least they have something more than just a listing that says 'gold' in the name!

You only hedge when you are producing!

I think that people are misunderstanding hedging! There is nothing particularly wrong with it and any smart mining company should certainly be looking at it as it (almost) guarantees a financial outcome. Heirhuner - of course they have hedged what hasn't come out of the ground! That's the whole point! There are two problems. Firstly, as indicated it limits potential upside so in a sharply rising gold scenario you don't benefit for the ounces you have hedged. Secondly, if you don't produce enough ounces to cover the hedge you will need to buy on the spot market. This could be at a considerably higher price and, hence, create a loss. This has actually caused companies to go under before now. Gold miners would have been very smart indeed to have hedged when it was at $1900/oz. However, for historical reasons gold miners have been averse to hedging as have investors.

There are losses and then there are losses. This would not be an actual monetary loss but more akin to an opportunity cost. I.e. they could have made '$50m rather than $30m' sort of loss. So it limits the upside, assuming gold rises beyond the point at which it has hedged. As I understand they have hedged 120k oz production at $1276 so at the moment they are still 'in the money'. If gold stays below this for the next 6 months then they would have made the right call. If they hadn't hedged production in 2015 they would have made a real loss as I understand. Actually, Perseus looks like a reasonable investment in a rising gold scenario although they appear to have experienced issues at their mine and have, amazingly, admitted that they have neglected grade control (quite an incredible admission!). The combination could be very interesting if the production can fund the development of Amara's assets.

Well, in a sharply rising gold environment Kolar is likely to do well. It is a marginal company but when the price of gold is rocketing even those companies have value. However, what is it actually doing at the moment? It is pretty much waiting on the most bureaucratic Government in the world. Apart from that opportunity, if you look at its website the resources it has defined amount to 138k oz across 3 locations only one of which has a decent grade. If they manage to get the Government in India to actually do things then it may be a game changer. But it is not something you want to rely upon. Dibs61 - I have had the decency to outline my case, perhaps you would like to do the same.

Well, I get a bit suspicious when a guy called Peter comments on a small buy by a guy called Peter! Looked at Kolar a few years ago. Wasn't a lot to it at the time but it was unique in terms of geography. Looking at it now it seems that nothing much has changed. Still unique geographically and still not very much to it.

Well, pretty much everyone I read is looking for a sharp pull back in the short-medium term. The COT report was pretty bad for gold (and horrific for silver), sentiment towards gold and miners is at a high level (negative for gold) and the market is taking a bit of a thump at the moment as the dollar is rising sharply. The parabolic move was too much too soon so it is bound to correct. If it goes very sharply the miners will get a stuffing. I will look to buy on the pull back.

I agree that this is undervalued (I also think that SHG is) at $1200 but the point is that there is the potential for a last hurrah for the gold bears which will cause the miners to fall. And I would suggest AAZ is rather more vulnerable than SHG at this stage. I like SHG as well as AAZ. Its production numbers were excellent last quarter as were its AISC numbers. It also has $19m cash which gives it a cushion. But I don't see why you can't own both.

$1240-1250 looks like a bit of a battle zone for gold at the moment. It can't quite seem to punch through. The analysts I follow still suggest that a pull back is inevitable and this ranges in size from $50 to $300+. The former wouldn't create much of a stir but the latter would devastate mining companies share prices given that all-in costs are probably higher in a lot of companies, which is why I am still holding off. The person calling for the $300+ drop is looking for a final blow out before the inevitable rise. He is not a long term gold bear.

THERE'S NO NEED TO SHOUT!

Still waiting for the 'green light' on this. The guys I follow are still somewhat split (although all are looking for a pull back in gold and miners at this point). Most bearish is looking for sub-$1000/oz and miners almost halving. This seems a bit too severe but it wouldn't be the first time this has happened in the last few years! Chris Vermeulen (the guy you mention Korg) is looking for a short term rise in oil and shares and short term fall in precious metals and miners. He is suggesting shorting the precious metals market. His time period is about a month or so. All of them are consistent about one thing - the stock market is toast in the longer term except for precious metal miners and gold is going to enter into an extended bull run. Vermeulen predicts that the next financial crisis will last for the next four years following a pretty horrific stock market collapse.

Virtually no activity at all as far as I can see - only £600 of trades. Gold has held up pretty well but the $1180-1200 area is important to hold if it is going to maintain the bull run at this stage. The jury is out at the moment.

Sorry 'trade'. Damned corrections!

It's just an uncrossing grade Hedgehog33

I'm almost hesitant to post this as I will be accused of deramping! You may have noticed that the Kitco website went down earlier under the weight of traffic. I just read that the last time this happened was when gold went over $1900! Whether this is indicative of a top, I have no idea but it is certainly indicative of a lot of interest in gold currently.