Pour me a glass too McGuirk!
Gold $416 Silver $6.63 Friday 4th February, 10pm Sydney
G'day. Please accept my apologies for my recent absence from the 'Ville. I have been nursing a sick lady whilst attempting to extinguish a few little bushfires in my life. My girl is back on deck but my retirement portfolio is a little toasted, notably through my Golden Star (GSS), Kinross (KGC) and Hecla (HL) exposures. Smokey the Bear couldn't have helped much. Age 65 is still a way off for me, so while the revaluation isn't very pretty today, I'm bloody comfy with where it's positioned. Que sera sera. My retirement portfolio is managed somewhat differently to the business portfolio, as timeframes and performance expectations differ dramatically.
Gold got banged harder than a dunny door in a cyclone, all on the same old IMF "gold sale-revaluation" rubbish. China and Japan have nearly a Trillion dollars in paper that they will readily swap for precious metal. This whole IMF "overhang" is a perception issue not a reality issue, IMO. But perception is reality in the markets, as Toddo always says. Reality should catch up pretty quickly. Let's see if this IMF gold ever hits the market and if so, watch where it goes and how quickly it moves there.
India were reported to be gonna sell some gold and silver from their official holdings. More silver than gold. The Indian population will just eat it up and if they get full, see previous paragraph. It's very small beer in the scheme of things. This is just more sentiment affecting news.
The $412 level of the 200DMA looks likely to be tested again in the paper gold market. The physical market is hoovering up a sheetload of metal down here. Turkey were the latest to inform that they are buying at a very fast clip, even at these "high" prices. The East is buying while the West is selling. Hmmm. You'd think that we'd have learned something over the last few thousand years.
The longer we spend below the $420 level the more concerned I will become, as it will confirm that the paper players are again well in control. I will keep watching the physical market 'cause that's where the real price is. Not much more to add on that. Should we see further weakness, I expect support around $407-8 and if gold gets any new friends pushing it higher, the $421 level will probably be a little tough to crack and again at $428 (not advice).
Silver is still stuck in its recent range and at present is of little concern to me as a silver bull. A break below $6.50 may get my attention, which may be only a session away, going off recent daily trading ranges. I dunno what will drive it lower based off my fundamental analysis. Maybe some dollar strength will hurt it, but in my opinion, the dollar means two-fifths of sweet FA to the silver market,except in the very short term. Open interest suggests we could have a serious short covering rally at any time. Options may be the safest play at this time. Just my interpretation.
The Amex Gold Bugs Index (HUI) only got nudged for 2% or so on the day, but did manage to break down through that 200 level. There's less than 20 points to go before I drop trou and run Walker St., starkers. Fine with me. The sun tan is pretty serious at present, so it should make quite a sight. I still reckon my white backside won't be seen but there's no way I'd welch on a bet. That's a cardinal sin in my books. Toddo's old granddad was so right. All you have in the end, is your word and your name. Lose one and you lose both.
Golden Star disappointed the market somewhat with their results and I'm still having a dig through the numbers. I see they only have 3.8million ounces of reserves at present and they're digging it up at less than $300 an ounce. Mine life is not an issue. Disconcerting was the recoveries at sub 70%. The corporate plays have affected them to their detriment, IMO. I will have further comment at a later stage on them and a few others.
I received a question regarding AngloAshanti's stock price the other day, which I was unable to respond to at the time. It's all about the Rand. Keep an eye on all the Jaapies (slang for South Africans). There's a heap of leverage to the gold price in many of them but the Rand is the key. Gold may go down more, but if the rand goes down faster they will outperform compared to U.S. mining companies, IMO.
Fannie Mae (FNM)... you are kidding! Tick, tick, tick ... kaboom.
On Wednesday we had the big Southerly buster down here and what a beauty it was. In fact we've had some crazy weather with snow on the ranges and wild storms everywhere. Cop this ...
Enjoy the weekend and the Superbowl parties. Lisa is holding an "Iggles" barbeque here and Mountadam Chardonnay will be the poison of the day. It has our famous Wedge-Tailed Eagle on its label and the wine is as good as it gets.
10.30am on a Monday is a bit early to be sucking down schooners of Victoria Bitter. Check out this bird! ... they're a very serious killing machine.
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