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Metals With McGuirk: A Wild Ride


PHYSICAL Silver has so many uses!

G'day. Apologies for the short break in transmission this past fortnight. Half of it was planned as we headed to Melbourne for the Cup week but the unplanned last 4 or 5 days has been a nightmare here in Sydney. I endured a "catastrophic malfunction in my hard drive," as my tech guru described it. EVERYTHING since April 2002 is lost and irretrievable. Back up your bloody hard drive - today!

It's not such a big deal to lose every e-mail contact and phone number in your system, but all of my research and data, reference material and website directories--and plenty of confidential stuff--are gone. I haven't even got my Mum's e-mail address! At least everything I've ever written is stored on the MV system. Anyway, I am trying to rebuild my stuff and it is a royal pain in the arse. Do you realize how many business cards are filed in an "outlook" system over 18 or so years? I'd better get one of those business card scanner things 'cuz 8 boxes of cards will take forever to manually input.

So, armed with a new computer (as of 24 hours ago) and not much else, we'll attack the New Year. Did I see a $66 billion dollar monthly deficit? Yowser. It wasn't all that long ago that a $30 billion deficit would've had people screaming blue murder, but it seems it's all OK these days at double plus. Inflation? What inflation? Something's gotta give.

Copper makes a new all time high, says Bloomies TV. Oil is back near that $55 target we spoke of a few months back and I still reckon we will see a new high before winter's end. Platinum, Palladium and Rhodium are moving higher. Hmmm. The social issues in Europe are a much bigger deal than many realize, IMO. France is not the only country where "issues" are gonna explode.

The metals have had a wild ride the past few days but I note that the gold price has held well above the $450 level which I see as telling. The moves have been violent, sure, but not unexpected. Silver only managed a couple of days below $7.50, as we suggested. I still contend that pullbacks in both metals may be steep, but they won't be long in duration. The physical markets will dictate such.

I see there is plenty of selling just below $470 and $7.75 respectively. The ECB's have been pretty busy with near on 50 tons dumped the past few weeks, yet gold is nudging Euro 400, a new high. Aussie gold has also ratcheted higher. The Indian and Asian physical markets enjoyed the brief foray in the $450s and were notable buyers. Hmmm.

The metal shares have performed pretty bloody ordinarily with Golden Star Recources Ltd. (GSS) being clobbered to $2.25-ish and look like ugly on any chart. They still have their reserves which remain unchanged and in the ground. I have yet to cover my sales at $3.47. I have serious concerns regarding management and am appalled that they propose to raise debt to fund expansion weeks after a $100 million plus takeover! I suspect someone will just walk in and gobble them up at a significant premium to today's close, based on reserves alone, but that is my speculation with no edge.

I see the Barrick Gold Corp. (ABX)/Placer Dome Inc. (PDG) deal has caused some discussion in cyberspace. I don't own or like either due to their hedge books so I am indifferent to the outcome. I am very interested in the Goldcorp (GG) part of the equation! Watching developments closely.

I got questioned a lot as to why I like Silver Standard Recources Inc. (SSRI). Someone said that they have no earnings. Correct. They also have no debt and plenty of cash/silver in the bank. They are not wasting reserves for little earnings, like some other notable silver companies are and have been for some time. They continue to develop and prove up reserves/resources and have great geographical spread of assets across the globe. They are incorporated in Canada. They are the non-maturing silver call option.

I reckon the paper players in both metals are still in control but for how much longer I dunno. The SUA are telling us how tight silver is in a physical sense cuz they are crapping themselves about a little 130 million ounce ETF. Silver bars trade at a 23 cent premium down here in Sydney, if ya wanna walk in and take the stuff away. Hmmm.

Having had no computer for a week while we tried to "save" the old one, I am a bit lost on a lot of what has been going on although it should be noted that if ever ya wanna totally destroy a hard disk, just get a 5kg silver bar. Too much confidential stuff was on it to be left with a rocket scientist, so we had a ceremonial "smashing." PHYSICAL Silver has so many uses!

Local News

The Melbourne Cup festival was huge. Lisa and I got all tarted up and did the big "race thing" hanging out in marquees and drinking and eating way too much. Vouvray did no good but that meant little on such an occasion. A great time was had ending with a full belly and an empty wallet.

Our little filly Maitrise ran last in her first race a few weeks back, as most would be aware. It was a 6 furlong sprint and she was just run off her little legs. By the time she got settled the race was over. She was very green and raced erratically but we weren't concerned- she ran the fastest last furlong in the race. Today she made her second start and the distance was a mile (400 yards further). It was a race that was 4 classes HIGHER than her maiden race. She hit the track at 50-1 today and the track announcer stated that she was the only horse in the race that couldn't win! She ran 3rd, flying home after being trapped behind horses until the last furlong. Hmmm.

The biggest match in the history of Australian soccer will be played at 7AM Sydney time on Sunday in Montevideo. Australia plays Uruguay for the final place in the World Cup Finals. They play again on Wednesday night here in Sydney at the Olympic Stadium with combined results deciding the winner. Our guys have little chance, I fear, but one never knows in sports.

Enjoy your weekend- I won't, I'll be trying to update my computer!

Positions in gold/silver/gss/gg/ssri

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