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Metals With McGuirk: Holiday Metals Shopping

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This is just a brief note from up at Hong Kong Long's new house on the Northern Beaches of Sydney. Bilgola Beach is a wonderful place just 45 minutes from the Harbour Bridge and the kids are loving it, sunburn and all. I took my young bloke, Billy, into the surf for the first time in his life today. At 3 ½ years he is fearless! He wanted bigger waves and just loved getting continually knocked down. He is gonna be a handful to manage in a few years, I reckon.

I dunno what to say about the metals. I'm buying physical for Christmas gifts and love the discount being offered. New Years is not far off. This volatility in metals markets should be with us 'till then as funds do their year end window dressing and people look to protect profits and revaluations.

Silver is off 15% from its intraday high last week and is back at my "wish-list" shopping target price. The absolute downside IMO is $7.78. I have no edge, no Bloomberg and no cable TV. It's perfect.

Gold is being hammered by the paper players again and expect the Indians, Arabs and Asians to pile in and take advantage of this decline in price. Inventory must be replenished by many physical dealers and they are keen to load up from what I hear. I reckon that $478 level is a big magnet but there is much work to do to break below $490-92.

I see Goldman upped its forecasts for gold in 2006 and '07. So did a few local banks here in Oz. Calling for $500-$525 isn't very gutsy these days! And how late????

I'm just gonna switch off the computer, relax and play with the kids and have a look again in the clear light of the New Year. I will drop a note if I see or hear anything extraordinary but I reckon it is the time of year to be careful in illiquid markets.

Hong Kong Long made me read a chapter of a book he was reading as he thought I'd like it - Clive Cussler's "Dark Watch." He casually said to me over a bottle or two of 1996 Penfolds St Henri Shiraz - "read Chapter 6." I did. You should. It is, of course, about Gold (and gold Leasing). It is fiction, sure, but very, very, close to the mark - IMO. I wonder where he did his research or from whom? I dunno what the rest of the book is about either before or after Chapter 6 but I am gonna go and buy a copy.

Today as we were sitting on Bilgola Beach, Maitrise had her final race of this preparation before heading to the spelling paddocks up at Woodlands Stud. She will be coming back for the big Autumn races in Sydney and the June carnival in Brisbane. She started as the even-money (1-1) favourite and duly won. She has won enough prize money this prep to ensure that we won't have to put any of our own money in the tin to cover the next few years training fees. It's about bloody time something went the right way, considering some of the metal stocks I own and their crappy performance with gold at $500! The race can be heard if you click on "listen" at top right of this page.

I will try and drop a line over the next 10 days but it's a bit hard to get excited about gold when sitting on a beach, slurping a few beers with family and good friends. Christmas Day is forecast to be 100 degrees. Better make sure the red Speedo's are ironed!

Enjoy the day

Laurie.

position in gold & silver

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