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Bumble

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  1. A short video from Gwen Preston, aka The Resource Maven, on why the prospects for gold and gold miners are positive at the moment.
  2. http://www.bbc.co.uk/news/world-us-canada-38848211
  3. The power of the tipsters... Last Friday (Jan 27) Money Week tipped Condor Gold and over the next two trading days (Jan 30, 31) it rose 20%. On Thursday Feb 1, Jay Taylor tipped Golden Predator Mining in a YouTube video and the very next day it goes up 15%. I like the setup for the gold miners right now. I'm hoping for another strong run like 2016. Silver miners perhaps even more so.
  4. Nobody has mentioned the ping test yet. Balance the coin on the tip of your finger and tap it gently with a key or another coin. It should give a nice clear ring. Fakes don't sound the same. If in doubt, try a smartphone app like Bullion Test - it will compare the ring frequencies with the ones it expects and tell you whether it is fake.
  5. There is no simple relation between the rarity of a commodity and its price. This is why it is nonsense when you hear people say that the gold/silver price ratio should be 9 because that is the ratio of production. Price is set at the margin where supply intersects with demand. Mineral water is abundant but expensive, because people are willing to pay for it; panda dung is rare but very cheap, because nobody wants it. More generally, the price of two commodities can only be expected to move in a definite ratio if they share the same marginal pattern of supply and demand. Gold and platinum are produced in similar ways, by mining, but mining companies cannot simply choose to switch over from producing one to the other because of a change in demand. Gold and platinum are also consumed in different ways: platinum is mostly an industrial metal, while gold is mostly in demand for jewelry and bullion.
  6. Not too shabby, but if you are a resource investor, compare it with what you could have achieved elsewhere in the last month: Gold miners (SGDM) up 6% Gold juniors (SGDJ) up 13% Uranium stocks (URA) up 36% Rare earths (REMX) up 14%
  7. According to this Bloomberg report, it applies to silver as well. https://www.bloomberg.com/news/articles/2016-12-05/gold-standard-approved-for-islamic-finance-opening-new-market-iwbytkoj Bear in mind that muslims have always been able to buy gold jewelry and coins, so the new standard may not be as big a deal as some commentators suggest.
  8. I saw a chart I like in an article on SeekingAlpha (http://seekingalpha.com/article/4036568-gold-rally-sustainable). Most charts of the gold price are shown in USD and everyone repeats the mantra that "gold is priced in dollars". Well, gold is actually priced in any currency you want it to be priced in. By multiplying the price of gold by the dollar index (DXY) you can separate movements in the price of gold itself from movements in the value of the dollar. The striking difference between this chart and the usual gold/USD chart is that from mid 2013 to end 2015 gold trended downwards in USD but gold.DXY trended upwards. The result is a plausible looking secular bull trend, although of course any extrapolation is speculative.
  9. Amusing and informative. This page shows the prices of gold and silver on the London exchange together with their prices on the Shanghai, so you can see the paper/physical spread. http://didthesystemcollapse.com/
  10. This links to a well-written report on the prospects for gold as of December 2016. http://seabridgegold.net/pdf/fn_12DEC16.pdf
  11. Alasdair McLeod interview. Precious metals, interest rates, economic outlook for 2017.
  12. It's the start of a new year. The gold miners did well in 2016, but finished well off the peak. Still, HUI gained 60% on the year, which makes gold and the gold miners the best asset class for the year. Sprott continue to hold Randgold, Agnico-Eagle and Royal Gold as their biggest three components of SGDM. Taylor Dart on Seeking Alpha likes B2Gold, Torex, Guyana Goldfields, Osisko and Teranga Gold. My guess is that once Trump is in office some realism will set in about what he is able to achieve. Although the Republicans hold the House and the Senate, many Republicans are opposed to budget deficits, and many just dislike Trump, so getting budget approval for his infrastructure spending may not happen. He will probably get approval for his tax cuts though. Where the US president has free reign is in foreign policy. Trump will be free to make friends with Putin. This could be good for Russian stocks, which are very cheap. We may see the Fed follow through with some 0.25% rate increases, but the rates are still very low, and likely to be below inflation, so this should not provide any headwind for gold. Elections in France and the Netherlands could provide some shock results that would be bad for the EUR. Italian banks are also teetering on the brink of insolvency. Money might well move from EUR into USD and maybe gold. If a full scale recession sets in, stocks will fall across the board, including gold miners. On the whole, there are more positives than negatives for gold, particularly in the first part of the year. Looks like a good time to start cost averaging back into the miners.
  13. I think you overstate it when saying that it is certain that we will see hyperinflation and will need wheelbarrows of cash to buy bread. A sustained but more modest level of inflation is possible. Another possibility is a debt default and a sudden revaluation. All are good for gold, so it doesn't hurt to hedge your predictions a little. Under investment demand, you might like to note that several countries, especially China and Russia are accumulating gold. Also, wealthy individuals are stockpiling it. On the supply side, gold and silver production is peaking and may decline unless the price picks up quickly. Under testing methods, you should mention ultrasound scanners. These can detect internal defects within bars, such as holes or tungsten inserts. Also, it might be worth mentioning that there are smartphone apps, such as Bullion Test, that you can use to perform a ping test and will tell you very reliably if a coin is fake. Your discussion of pricing doesn't mention the London Fix. You say: "Gold bars are typically pure (.9999 fineness)" - this is typically true of smaller bars of 1 kg or less. London Good Delivery bars are usually between 99.5 and 99.9%. Admittedly, most people will not be buying large bars like that. Under the strategy and plan section, it is worth pointing out that because gold and silver prices are highly volatile, they are not suitable for savings that you might need in an emergency, because you might be forced to sell them at a poor price. When mentioning naked shorting you might like to include a chart similar to the one attached, from Zero Hedge. It shows the huge increase in recent years in the ratio of open contracts for gold against the amount of registered gold available for delivery. You may need to put in some explanatory text to say what that means, but the chart speaks volumes. The book as a whole is very US-centric. You might like to adjust the wording in various places to make it more inclusive.
  14. There is a nice write-up of the current state of affairs by Alasdair Macleod here: http://www.gold-eagle.com/article/credit-cycles-and-gold-price
  15. I don't see how India can ban gold imports. India is one of the biggest manufacturers of jewelry in the world. A lot of this jewelry is exported, so it creates jobs and earns foreign currency. At the very least, India would have to permit gold to be purchased by jewelry makers who export, and once the gold is in country, it will be difficult to track. Also, the last time India tried to restrict imports of gold it just created a booming business for smugglers.