Where Is Gold Going In This Market

[churchill]

I was quite surprised at UBS' hefty target price reduction of one of the gold mining stocks I own, based on higher costs and lower gold prices as per the market factors below

"UBS has downgraded its recommendation for Russian gold miner Petropavlovsk from buy to neutral after cutting its 2012 gold forecasts substantially.

"A continuing US recovery, material erosion in Fed QE expectations, rising Treasury yields, a stronger dollar and questions surrounding the durability of the Fed's low-until-2014 rate pledge all combine to act as the prime culprits that lead us to downgrade our 2012 gold forecast," said analysts Ben Davis and Myles Allsop.

To reflect these lower prices and higher guided costs, the broker has cut Petropavlovsk's 2012-14 earnings per share (EPS) estimates by 50-65%. As such, the target price comes down from 1,070p to just 650p."

http://www.hl.co.uk/...vsk,-tui-travel

Can't say I agree with such a significant downgrade, so I looked up what their latest gold forecast was, and they've cut the FY forecast by 18% to $1,680 an ounce, as follows

http://www.bloomberg...8-to-1-680.html

That's a weak year for buy/ hold the metal.

On the other hand, the miner (POG:LN) still looks very good value. Trailing P/E of 7.5, and pays a div of 2.3%. Revenue doubled in the year, and net income and EPS were up 10x for 2011 vs 2010, plus they expect increased in production from 630koz to 680koz in 2012 due to larger capacity. The average gold price they sold at was 1,617/oz in 2011 so even by UBS' estimates that would be flat or a bit higher for 2012. Can't see costs going up that much that EPS would drop so significantly given extra capacity/production and a flat/higher gold price, even though they've higher debt levels. [Worth noting they value most of their reserves at 1,000/oz and some smaller ones around 1,200/oz, and they revised total reserves up by 6% in Feb]

Miners generally have been lagging the gold price movements in the last couple of years. I don't feel so bullish anymore for gold prices, but will look to add to this miner and others. Many of the miners don't seem to have the increased gold prices of recent years fully built in, and even if gold is flat this year, that looks good for miners...

Miners are due a bounce .. but I have been saying that for 6 months ..

Humbled gold miners sweeten pie to entice investors

http://www.reuters.com/article/2012/03/29/us-mining-summit-gold-valuations-idUSBRE82S0OX20120329

[churchill]

My preferred dealer has gold kilo at close to £34,000 ; lowest for quite a while.

Nice time to buy?

Big or at least decent bounce buy this time next year?

Second part I'm expecting due to Mild to server recession in the west with euro trouble worsening by year end.

( I just sold a house and will b using the funds to extend my house about this time next year or buy another one; I don't have enough faith in the system to keep any sizeable amount in the bank.)

So what do you think? two 500gs or a big load of silver ks in the mix?

I expect a dip in uk house prices across the board by years end. Any thoughts on this?

I am remortgaging now at current values (up 20% plus in my area + increases from renovations I've varied out since buying at lowest point) so I can sit on cash/ metal ready to jump in at the bottom of the coming down turn.

If you want to buy PM's I would buy silver as well ...

If you are in the UK and want to buy another house in the UK I would keep funds in GBP .. and probably wait to see how the market does over the next year or so .. and I'm sure if you keep an eye out and do not rush you will get a good deal .

[midas]

My preferred dealer has gold kilo at close to £34,000 ; lowest for quite a while.

Nice time to buy?

Big or at least decent bounce buy this time next year?

Second part I'm expecting due to Mild to server recession in the west with euro trouble worsening by year end.

( I just sold a house and will b using the funds to extend my house about this time next year or buy another one; I don't have enough faith in the system to keep any sizeable amount in the bank.)

So what do you think? two 500gs or a big load of silver ks in the mix?

I expect a dip in uk house prices across the board by years end. Any thoughts on this?

I am remortgaging now at current values (up 20% plus in my area + increases from renovations I've varied out since buying at lowest point) so I can sit on cash/ metal ready to jump in at the bottom of the coming down turn.

If you want to buy PM's I would buy silver as well ...

If you are in the UK and want to buy another house in the UK I would keep funds in GBP .. and probably wait to see how the market does over the next year or so .. and I'm sure if you keep an eye out and do not rush you will get a good deal .

but where is the bottom ?

http://www.thisismoney.co.uk/money/mortgageshome/article-2107661/RICS-UK-property-market-worst-Europe-prices-France-Germany-rise.html

[fletchsmile]

Miners are due a bounce .. but I have been saying that for 6 months ..

Humbled gold miners sweeten pie to entice investors

http://www.reuters.c...E82S0OX20120329

Yes a pretty accurate assessment in my view. The miners did have it good up until a few years back and funds like BlackRock Gold and General were excellent. I do think the gold miners became overpriced though. The last couple of years has swung completely the other way, and they look cheap to me. POG above is just one example 7.5x earnings. I don't see the "premium" to other miners coming back soon as there are too many other plays these days, eg resources, emerging markets, technology etc etc, but I do think they're due at some point a re-rating so their valuations at least come back in line.

eg Junior Gold Trust is down 10.1% YTD. Junior Oil Trust by the same fund management house and run along similar lines is up 35.0% this year. Needless to say I'm happy with the latter, but will be keeping hold of the former as well as the gold miners will have that re-rating at some point - just don't know when...

I also do believe ETFs have given an additional choice, and this will be one reason the premium on gold miners has gone, as well as obviously driven up the commodity price too, so a double whammy for the miners.

Edited April 2, 2012 by fletchsmile

[churchill]

My preferred dealer has gold kilo at close to £34,000 ; lowest for quite a while.

Nice time to buy?

Big or at least decent bounce buy this time next year?

Second part I'm expecting due to Mild to server recession in the west with euro trouble worsening by year end.

( I just sold a house and will b using the funds to extend my house about this time next year or buy another one; I don't have enough faith in the system to keep any sizeable amount in the bank.)

So what do you think? two 500gs or a big load of silver ks in the mix?

I expect a dip in uk house prices across the board by years end. Any thoughts on this?

I am remortgaging now at current values (up 20% plus in my area + increases from renovations I've varied out since buying at lowest point) so I can sit on cash/ metal ready to jump in at the bottom of the coming down turn.

If you want to buy PM's I would buy silver as well ...

If you are in the UK and want to buy another house in the UK I would keep funds in GBP .. and probably wait to see how the market does over the next year or so .. and I'm sure if you keep an eye out and do not rush you will get a good deal .

but where is the bottom ?

http://www.thisismon...rmany-rise.html

In the UK .. must be linked to rental values , which in the SE are pretty strong ...

[Naam]

fuel for the gold bug mills:

http://goldswitzerland.com/index.php/peter-schiff-there-will-be-a-lot-of-pain/

[Naam]

Standard Bank

Focus: Futures market cautious on gold, bearish on silver

Ending three weeks of strong declines, net speculative length for COMEX gold pushed higher, adding 70.4 tonnes over the past week. The change in the net position was largely the result of speculative longs being added (49.9 tonnes). The

20.5 tonnes unwound from shorts also contributed significantly to the overall improvement. Total short positions have now once again slipped below last year’s average—a more comfortable level. However, while the improvement is encouraging, net speculative length is still relatively weak—currently at 514.6, below the 2012 average of 671.3 tonnes. We are hesitant to call the futures market as bullish on gold yet.

ETF enthusiasm has resurfaced, although only modestly. A mild 7.1 tonnes were added to ETF holdings of gold over the past week. Once again, while enthusiasm appears to be returning, it remains cautious.

For silver, the story is even less encouraging. Net speculative length for COMEX silver fell off dramatically, with 529.4 tonnes shed. A 350.1 tonne unwinding of long positions, with a simultaneous 179.2 tonne increase in shorts (the largest increase of the year thus far) caused the overall deterioration. Futures market participants are definitely sceptical about the prospects for silver.

ETFs were net buyers of silver, adding 22.6 tonnes to their holdings. However, the timid nature of this buying does not inspire much confidence.

The one positive for silver in the CFTC data is that the drop off in net speculative length has seen it also fall as a percentage of open interest. Currently, the figure is at 14.9%, now below last year’s average of 15.7%—a sign that the market is less stretched than it has been for the last seven weeks.

Our fundamental analysis combined with the apparent return of investor scepticism leads us to maintain our view that rallies should be sold into. We wait patiently for the metal to drop closer to $30/oz. Around this level, we see good value with the potential to reach $40/oz in Q3:12.

[KamalaDreamer]

Standard Bank

Focus: Futures market cautious on gold, bearish on silver

Ending three weeks of strong declines, net speculative length for COMEX gold pushed higher, adding 70.4 tonnes over the past week. The change in the net position was largely the result of speculative longs being added (49.9 tonnes). The

20.5 tonnes unwound from shorts also contributed significantly to the overall improvement. Total short positions have now once again slipped below last year’s average—a more comfortable level. However, while the improvement is encouraging, net speculative length is still relatively weak—currently at 514.6, below the 2012 average of 671.3 tonnes. We are hesitant to call the futures market as bullish on gold yet.

ETF enthusiasm has resurfaced, although only modestly. A mild 7.1 tonnes were added to ETF holdings of gold over the past week. Once again, while enthusiasm appears to be returning, it remains cautious.

For silver, the story is even less encouraging. Net speculative length for COMEX silver fell off dramatically, with 529.4 tonnes shed. A 350.1 tonne unwinding of long positions, with a simultaneous 179.2 tonne increase in shorts (the largest increase of the year thus far) caused the overall deterioration. Futures market participants are definitely sceptical about the prospects for silver.

ETFs were net buyers of silver, adding 22.6 tonnes to their holdings. However, the timid nature of this buying does not inspire much confidence.

The one positive for silver in the CFTC data is that the drop off in net speculative length has seen it also fall as a percentage of open interest. Currently, the figure is at 14.9%, now below last year’s average of 15.7%—a sign that the market is less stretched than it has been for the last seven weeks.

Our fundamental analysis combined with the apparent return of investor scepticism leads us to maintain our view that rallies should be sold into. We wait patiently for the metal to drop closer to $30/oz. Around this level, we see good value with the potential to reach $40/oz in Q3:12.

Up to you

[Naam]

gold is boring! the resident gold bugs should look for alternatives... such as the "new" restructured Greek bonds in which i invested last week nominal one million €UR and lost 8% in just two trading days. life is difficult!

[flying]

gold is boring! the resident gold bugs should look for alternatives... such as the "new" restructured Greek bonds in which i invested last week nominal one million €UR and lost 8% in just two trading days. life is difficult!

At least you can smile at it

Will make the next successful trade taste better too

[Naam]

At least you can smile at it Will make the next successful trade taste better too

remember when i told you last week "minus 5%"? i wasn't smiling then

Edited April 3, 2012 by Naam

[flying]

About 2pm NY time gold got slapped

If I were not swapping countries I think I may have jumped in on anything below $1650

[flying]

Here is the slapper

From a personal standpoint I hope for a harder slap as I am

swapping USD > THB

But of course after that gold will rise like the phoenix

[flying]

Ahhhhh....2pm NY time it was too...would have been a useful short for the traders of paper

The FOMC minutes at 2 PM NY time set off a sell signal in gold of about 2.25%, and to a lesser extent stocks .90% and silver which was down 1.44%.

All three recovered somewhat into the close.

Edited April 3, 2012 by flying

[Naam]

All three recovered somewhat into the close

somewhat... hmmmm...

[udonguy]

I start to wonder if Gold reached it's peak and will never get above 1750 again *sigh*

[flying]

I start to wonder if Gold reached it's peak and will never get above 1750 again *sigh*

Just my opinion & not a recommendation to buy or sell but..................

Think of what caused gold to rise......

Has anything been done to repair that?

Not at all IMHO so as I said earlier today for myself if I was not in the process of moving

anything below 1650 would see me restocking what I sold at 1770

[udonguy]

I start to wonder if Gold reached it's peak and will never get above 1750 again *sigh*

Just my opinion & not a recommendation to buy or sell but..................

Think of what caused gold to rise......

Has anything been done to repair that?

Not at all IMHO so as I said earlier today for myself if I was not in the process of moving

anything below 1650 would see me restocking what I sold at 1770

thank you for comments but I 'can' see some 'repair' going on and sort of begin to wonder everyone has steeled themselves for the 30 years of constraint and pain and sentiment and investment coming back - what REALLY scares me is all the Billions in cash waiting to hit the stock market which may see rising values and a dropping Au

[Naam]

Churchill stop selling!

[metisdead]

Troll posts and replies have been removed.

[churchill]

Churchill stop selling!

It's Not me ....

Liked this commentary ..

Enough of this "gold and QE" and "gold and inflation" bullshit.

http://myownmarketnarrative.blogspot.com/2012/04/enough-of-this-gold-and-qe-and-gold-and.html

[Naam]

miners... have better opportunity to make money, the minute India and China start buying their gold again at the previous pace. Which is probably next week or something.

in the mornings or afternoons of "something"?

[midas]

tick tock tick tock....

Nearly 57% of Spanish Budget Devoted to Pensions, Unemployment Benefits, and Interest;

Spanish unemployment is up for the 8th consecutive month and may soon top 25%. Moreover, revenues will drop substantially.

http://globaleconomi...arly-57-of.html

Edited April 4, 2012 by midas

[churchill]

miners... have better opportunity to make money, the minute India and China start buying their gold again at the previous pace. Which is probably next week or something.

in the mornings or afternoons of "something"?

Remember our Head and Shoulders ..it's still there ... but perhaps a washout is needed ..

[Naam]

Spanish unemployment is up for the 8th consecutive month and

may soon top 25%. Moreover, revenues will drop substantially.

that explains the present strength of Gold.

[Naam]

Remember our Head and Shoulders

i don't share my shampoo with you Churchill!

[Naam]

i don't believe in TechAnal Churchill. however, when i look at

6months Gold i see near perfect inverse head and shoulders.

[Naam]

AARRRRGGGHHHH... i think Midas has started offloading too

[midas]

AARRRRGGGHHHH... i think Midas has started offloading too

its the Germans ! they want it back

Repatriate our Gold!

http://www.gold-action.de/campaign.html

independent, full, neutral and physical audits of the gold hoards of the world´s central banks

[mccw]

I start to wonder if Gold reached it's peak and will never get above 1750 again *sigh*

Just my opinion & not a recommendation to buy or sell but..................

Think of what caused gold to rise......

Has anything been done to repair that?

Not at all IMHO so as I said earlier today for myself if I was not in the process of moving

anything below 1650 would see me restocking what I sold at 1770

thank you for comments but I 'can' see some 'repair' going on and sort of begin to wonder everyone has steeled themselves for the 30 years of constraint and pain and sentiment and investment coming back - what REALLY scares me is all the Billions in cash waiting to hit the stock market which may see rising values and a dropping Au

Even if the Global economy does get going again it looks to me that it would soon be knocked back by the concurrent boom in commodity prices; especially oil price, look at it now, and we've hardly got going yet.

So gloom of debt burdened governments austerity contracting economies bringing on further recession. Or gloom of more debt fuelled growth, crashed again by crazy commodity prices leaving a bigger debt mess the next time.

Best case I could hope for is stagflation while paying off debts (looks like we may get this in uk) and global market regulation (more chance of hell freezing over).

I think for long term stability commodities should only be allowed to be traded by those who will take physical deliver.

Too much money in the system.

I expect barter on a national level and gold and silver between corps will gradually become common place along side currency transaction over the next decade.

All looking good for PMs for the long term ; over cash in the bank certainly, although trading all around like what some of you seem to do I'm sure can make more profits I'm personally not comfortable with the level risk.

Or is it just my perception? I was humming and haaring for a while. Then This mf global story really put me off. Does Barclays stock brokers have a trading arm also; ie could ones account and everything in it be lost if Barclays went bust?