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Random Thoughts On Gold

By

Stroll down Memory Lane

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G'day….Would someone please turn down the bloody temperature!! It's nearly too hot to even sit around drinking beer, although Yankee Stadium had better have plenty of cold ones at the ready. The Lisa, mega-shopper extraordinaire, has abandoned the specialty shops 'coz walking around New York City is just too hard. The last I saw of her she was melting into the sidewalk somewhere up near 58th street looking for the air-conditioned sanctuary of Bloomingdales. I knew she couldn't resist, no matter how hot the weather.

Some quick points on the metals….

  • The gold price in Euro terms is back up through $510. Check the 1 and 5 year charts.

  • The gold/silver ratio back under 54 after nudging 60 a couple of weeks back. Looking for 45ish at first glance.

  • Silver producers are all the go today with Helca Mining (HL), Coeur d'Alene Mines (CDE), Pan American Silver (PAAS), Silver Standard (SSRI) all tacking on 5-10% gains. Nice work if ya can get it.

  • One of my favorite high cost producers, DRDGOLD (DROOY), is up 7%.

  • Note that Oil futures have just about ticked up though the magical $80 per barrel level.…see futures for mid-2007 delivery. There is NO futures contract below $70!!

  • How about the gold forward curve…Barrick Gold (ABX) hedge book revaluations must have a few bank credit officers sweating bullets. Others are in similar positions such as Australia's Newcrest.

  • Is anyone looking at the oil for gold swap apart from Mr. Putin and a few of the Sheiks? Gold is cheap in Oil terms versus the historical average. Swapping a dwindling finite resource for an infinite store of value is just smart management.

  • Are the umpires at today's Blue Jays-Yankees game gonna wear their glasses so they can see the strike zone? They certainly were "blind" last night.

  • HUI is back at the 350 level after the recent hammering down to 280ish…Patience is rewarded in metals and being too cute can make you miss some good price action.

  • No one is talking about precious metals or equities...That's good and indicates plenty more $$ to pile into the sector from this lofty base.

  • Inflation? What inflation?


Professor Weldon and his Mrs. are taking The Lisa and I out to the game in an hour or so. Apparently Yankee Stadium has some history to it and he's gonna show us around a bit. There are a couple of good bars in the vicinity as well – let's just hope the beer is cold. Bill Meehan is happy that he gets tonight off from entertaining The Lisa and I at another of his local haunts… his liver is crying after the last couple of nights. I dunno why, it's only beer.

Best,
Loz.

PAAS, SSRI, DROOY, Oil, gold and silver

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