February 19, 2018 
 Monday 
 
 

Forum
Topic:
Gold Enters Major Bull Market

       

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 By Michael Miller

12/29/2006  1:18PM

Bluejay, thanks again for your references. You prompted me to write a paper on shares outstanding and market capitalization that will compliment your last entry. I’ll post it if it makes any sense. Would you give us your opinion about the following? (For new readers, Bluejay had a seat on the Pacific Stock Exchange and is knowledgeable about the stock market. Don’t know when he began to take gold seriously.)

With the DOW hitting all time highs is that a sign of inflation? Pundits in the 1980’s claimed that gold and stock prices worked in opposite directions. When stocks increase, gold drops. I never understood the logic behind this. Do you? Also does a comparison of the stock prices and gold prices have relevance today? As you look back (and I know you are a terrific chartist) does gold lead the DOW or visa versa? Is there any relationship between the two?

I think that gold has outgrown some of its “inflation" moniker and “in time of war” reality. Buying power could be one motivation for including gold in ones portfolio. What do you think?
 By bluejay

12/27/2006  8:51PM

GOLD $627.50

Bloomberg.com
December 27, 2006
"Gold Takeovers Reach Record As Companies Fail To Find New Mines."
writer: Choy Leng Yeong

The following are a few excerpts from this article:

Mines are being depleted faster than new reserves are being found.

Cost of (takeover) reserves rose to $120 an ounce in 2005.

Last month when GoldCorp acquired Glamis, it paid $175 for each ounce of reserves.

GoldCorp's president, Ian Telfer, said the lack of new supply will help boost gold prices by $200 an ounce over the next two years to top $800.
 By bluejay

12/04/2006  12:19AM

The U.S. Dollar Index closed out the week at 82.85 which was off 2.26 points from the previous week's close. This is its lowest close since May of 2005. In December of 2004 the Dollar's key low was made at 80.50.

In October the Wall Street Journal reported that Treasury Secretary Henry Paulson had requested the Plunge Protection Team he chairs to meet more frequently. The Team is made up of the U.S. Treasury, the FED, the SEC and the Commodity Futures Trading Commission. Since Paulson's request the Dollar has gone straight down. Also, in the same WSJ story Paulson is quoted as saying, "we are overdue for a financial crisis."

The group is also looking into hedge funds and the large drivatives market. The total outstanding world derivatives contracts total an astronomical $370 trillion.

In the past months three hedge funds have declared bankruptcy. One of these lost everything they had by betting on the wrong side of the natural gas market. The loss was so large that a ripple effect almost completely ruined the London natural gas market.

Refco Securities imploded not too long ago. Part of the truth of what happened with them came out slowly. More than likely the sporadic news announcements were orchestrated by the Plunge Protection Team so that confidence in the financial markets was not disturbed.

Just the slight smell of any more hedge fund failures or the hint of derivative failures, like happened at Refco, will put downward pressue on the Dollar which will equate to higher gold prices.

If the 80.50 level on the U.S. Dollar Index gives way, expect a farther drop to the 72.00 level. If that happens, gold should better its 2006 high of $730.
 By bluejay

12/02/2006  12:28PM

Is your accumulated wealth being destroyed by inflation?

We need to look more closely at the relationship of gold to real things to understand what's happening to our wealth. An adage familiar to most is, an ounce of gold will always buy a good tailored men's suit. Believe it or not, people used to have gold coins and they routinely traded them for real things.

It didn't take too long in recorded history for governments to figure out that they had limited political power when people traded directly with each other by the exchange of gold. So the concept of issuing monopoly money, fiat currencies, was created. The problem with monopoly money is that somewhere along in time the people don't want the bills any longer. This usually occurs when issuing more and more paper causes so much inflation that people wake up to realize that that their wealth has been compromised or in some past instances, it has totally been destroyed.

In order to keep the monopoly money circulating the issuers use all types of tricks in an attempt to fool the people that their wealth is intact. The issuers routinely attempt hypnosis in the media. Their biggest gambit is to lie to their constituents concerning the real rate of inflation. Recently, the government stopped reporting how many new dollars are being printed. It is obvious that the government is reducing the visibility for people to look over their shoulder. The statement that is appropriate here is, empirical history strongly suggests that secrets will destroy organizations.

On December 01, 2006 Dan Norcini forwarded a missive to Jim Sinclair concerning gold and protecting your wealth. The letter, along with two supporting charts, was reprinted at http://www.jsmineset.com and is available for reading under the topic, DJIA Compared To The Dow/Gold Ratio.
 By Michael Miller

11/30/2006  8:52AM

Predicting future gold prices combines art and science for sure. The fellow you wrote about took an aggressive path to get to $1600 spot. My fellow director, Lee Erdahl, gave me a great answer to the question, “Where is the price of gold going?” Gold is going up or gold price is going down. This is my usual answer to a casual question; however it is easy to see the overall direction and the price points of accumulation and disposal.

I’ll step outside this comfort zone with an observation on price based on my actual experiences during the time when spot hit $850. The mining executives and guys I knew and talked to in, was it 1981, the gold business were shocked when spot passed $650. We just shook our heads and were speechless when it broke $800. The producers knew that the new gold supply/demand curves did not support the price.

After the fall an investment banker came up to Alleghany to see the mine operation. During our visit we talked about the $850 price. I said something like, “Who in the world were the people buying gold at its high?” He paused for a bit and said, “You are looking at one of those people.” I asked him how and why he got sucked into buying, being a banking executive and businessman. He said he had watched it going up, going up, going up and finally felt he had to get gold because it was predicted to go through the roof. He bought at exactly the top. Can you believe that, a banker no less buying gold at the top.

My mining pals were happy with a $400-450 because our costs had not gone up at an equal rate as gold.

When I read your last entry (and I do read, appreciate and look forward to your input) I smiled….$1600 an ounce could be true. The lesson from the banker’s experience has stayed with me: Few people are disciplined enough to know how and when to join the gold market. Most will procrastinate both on the buy side and the sell side. When greed and envy finally become overpowering, a pack of well meaning buyers will flock to the market, thereby pushing the price well beyond the producers’ expectation. Will it happen again? You can bet on it.
 By bluejay

11/29/2006  11:10AM

Will gold go to $1600 an ounce?

So says Alf Field in a November 28th posting under Contributed Commentaries at Kitco.com entitled, "Elliot Wave Gold Update X."

Alf basically says, gold is in a major third wave with an expected price destination of $1600. This larger third wave will be composed of five smaller waves.

Of these smaller waves, wave #1 began the 6th of October at $560 and is expected to go to $870.

Wave #2 will be a declining move from $870 to $730.

Wave #3 will be an advancing move from $730 to $1230.

Wave #4 will be a declining move from $1230 to $1030.

The final wave #5 in this major 3rd wave will move from $1030 to $1600.

Alf doesn't predict times of these moves but just says, they will happen.

Jim Sinclair at jsmineset.com basically says that the years 2007 and 2008 will be extremely rewarding for holders of gold and the shareholders of gold companies plus the fireworks are yet to come.

All along gold's travels to higher and higher prices you will be tempted by the gold miscreants to sell your gold or mining shares. The constant activity of this group is to create illusion. Don't let the gold miscreants trick you out of your metal and shares. We all know who they are.

Holders of gold and gold shares need to prepare themselves for the selling shocks to the market that these miscreants can create with help from their bearish sidekicks at the hedge funds.

Alf has outlined quite well that expected sell offs in the future will be in the neighborhood of 16%. Use these price contractions to add to your positions as you are allowed to save in the months ahead. Good luck!
 By bluejay

11/23/2006  1:31AM

You think Barrick is an aggressive outfit?

What would you call an entity that borrowed physical gold from central bankers to sell into the open market for a profit while others in the same industry had their earnings reduced as a result or even went bankrupt or just had to leave the industry all together? Well, that's exactly what Barrick Gold did. In the end, they were immune from any prosecution for market manipulation because they were an admitted agent of the central banks. Sounds like a license to cheat, doesn't it?

Could Barrick be attempting to steal the in-the-ground gold from the NovaGold shareholders to facilitate not having to buy back the physical metal in the open market that they had orginally sold into? This could be more market manipulation plus intimidation for profit from their reported warning to the NovaGold shareholders.

Who in their right mind would sell their NovaGold shares to Barrick for cash and have to pay a 30% tax on that money at $16 a share and exit the fantastic potential in the years ahead at Donlin Creek?

SBK Consulting's study of Donlin Creek shows that the deposit has the capability of producing 1.885 million ounces of gold per year at an average cash cost of $223 per ounce of gold over an estimated 22 year life of the project. This estimate was based on the resources established through 2005.

Reported drilling to date can not locate where the deposit ends. This deposit is already an elephant and continued drilling just makes it bigger. Unfortunately, not all of Barrick's drill results from March of this year on the property have been given to NovaGold sharedholders for whatever reasons.

The gold at Donlin Creek is no-see-gold which means you pick up the ore and can't see any signs of gold. This is the same physical type ore that is mined on the Carlin trend. The gold is 5 micron sized. NovaGold's finds at Donlin Creek are as good or better than most of the existing mines in the Carlin trend.

The Carlin trend is 40 miles long while the trend that NovaGold has claims on is, atleast, 10 miles long. Bob Moriarty in 2002 said, NovaGold has found a Carlin trend deposit in Alaska and there is a lot of it.

It appears Barricks doesn't want to comply, or can't comply, by the November 2007 dateline to meet their contractual obligations with NovaGold on their Donlin Creek Joint Venture Agreement. If satisfactorily completed, it would have allowed Barrick to back in to an additional 40% interest in the property.

Barrick is offering to buy NovaGold for $1.7 billion. Why would anyone sell it to them for such a redicuously low price when the entire Donlin Creek gold production over the next 22 years will command in the multi billions of dollars?

Mineweb on August 16, 2006 reported the following:

NovaGold President and CEO Rick Van Nieuwenhuyse is fighting mad, and determined to battle Barrick to the finish over what he claims is a litany of illegal and unethical behavior by the worlds's biggest gold miner.
 By martin newkom

11/22/2006  3:06PM

Appears that Barrick is a rather agressive outfit. They
want that Donlin Crk. claim.
They should put their money
where their mouth is and really
"up the ante".
 By bluejay

11/20/2006  3:30PM

The Mining Journal Online today reported the following:

Barrick Gold Corp. warned shareholders of NovaGold that their company has left important questions unanswered and could see its share price collapse as it fights off the former's hostile U.S. $1.7 billion takeover bid.

NovaGold said it spent U.S. $4.7 million on legal and advisory costs in the quarter related to Barrick's bid, originally made in June.

Last week, Barrick dropped the requirement that at least 50.1% of NovaGold's shares be tendered to its "best and final" offer of U.S. $16 a share, after the vast majority of NovaGold's shareholders declined the takeover offer.
____________________________

This kind of talk from Barrick is most certainly brazen and arrogant. What are they so frustrated about? NovaGold's main Donlin Creek asset in Alaska is one of the world's largest undeveloped gold resources but it belongs 70% to NovaGold and 30% Barrick. If Barrick wants to own it, then Barrick will have to resubmit a bid to the company for what it's worth and then, maybe. The $16 a share bid is way out of line according to many in the industry.

Barrick might have a lot of wealth and political might but the shareholders of NovaGold own the majority of Donlin Creek. Who is pulling the strings at Barrick these days and who is responsible for ordering this threat? Is it time to call Robin Hood and the Merry Men?

The tactic of trying to frighten shareholders is not new. The CDAA carpetbaggers tried it once with this company and are now paying a political price. These attorneys made a crucial mistake, "never underestimate your opponent." Maybe these people should go back to school and take a course on perspective.

Hopefully, shareholders of NovaGold will continue to tell these guys to go fly a kite until such time that Barrick decides to step up and pat the pony.
 By bluejay

11/04/2006  1:28PM

Gold was firmer last week, closing at $627.20.

Mr. Dan Norcini of Houston, Texas states that gold's action indicates that the former swing higher near the 680 level is in play.

Mr. Norcini makes regular weekly contributions at http://www.jsmineset.com. Current comments and charts on gold, silver, the U.S. Dollar and crude oil are available for viewing.
 By bluejay

10/21/2006  10:16PM

A major informative article has been written and posted to http://www.jsmineset.com entitled, Another Dastardly Deed Has Been Done.

Mr. Sinclair calls the deed an unfortunate super spin.

Check it out and get educated.
 By bluejay

10/16/2006  4:57PM

Gold has recently been firming. The current last sale is $596.20

The following are a few comments made today by Mr. James Sinclair at jsmineset.com concerning gold's recent weakness from about the $610 area to just above $560:

1- The battle has been won.

2- The lows are in.

3- Setbacks are an opportunity, not precipices from which more pain looms.

The Assosciated Press released for publication in our local paper yesterday, October 15, 06, an article entitled, Commodities Continue to Founder written by Ellen Simon.

Ms Simon mistakenly includes gold as being a commodity. Gold is a commodity when the world's financial house is in order and it is a currency when that house, especially the U.S.'s house, is out of order.

Here is the slant in the article that forecasts a lower gold price.

"Commodities prices tend to have a domino effect - lower oil prices often drag down gold prices."

"While emerging markets continue to be on a tear, if the commodity bears are right, there may be plenty of pain to spread around."

Richard Bernstein says,"(commodity) prices are now 60% above what could be explained by fundamental supply and demand. These data suggest that September's downfall in commodities might only be the beginning of a protacted bear market."

Tobias Levkovich, Citigroup Inc."s chief U.S. strategist says, While the argument for continued high prices for commodities is that demand will continue to grow, Levkovich points out that there's some room for supply to grow, too, with a possible increase in Saudi oil production and a recent Chevron Corp. find in the Gulf of Mexico.

So here's the thesis, gold is going lower because oil is going lower. Don't bet your house on it.

The new field in the Gulf will probably take 10 years or so to bring into full production.

The rule in Saudi Arabia by the Royals should be considered temporary, at best. It is just a matter of time before the Muslim fundamentalists force them out. Prior to that happening, don't be surprised if the oil producing infrastructure starts to get attacked. When that happens, oil and gold will rapidly advance.
 By bluejay

10/05/2006  2:45PM

Gold is in the midst of a bull market shakeout being engineered by the aforementioned miscreants along with amplification from the hedge funds with their computer trading models.

Wild swings are just part of the personality of this current bull market. The hedge funds with their great investor wealth will follow any spurts of strength or weakness.

Hedge funds are market gun slingers. They are usually run by young and inexperienced traders. Might does not make right. Recently, two hedge funds have declared bankruptcy.

The pendulum swings both ways.
 By John Yuma

10/04/2006  3:33PM

Bluejay:
What do you think of the gold price today????
 By bluejay

10/01/2006  12:10PM

"I'm unashamedly, utterly bullish on gold," Newmont Mining president Pierre Lassonde said at an industry conference in Denver on September 27th.

"The current-account deficit in this country is going to reach a trillion dollars very shortly. The dollar has nowhere to go but down."
 By bluejay

09/29/2006  5:10PM

Rick

There is a tutorial on some facets of charting tonight at the http://www.jsmineset.com.

This is an excellent lesson and puts you right in the classroom with an experienced instructor.
 By bluejay

09/28/2006  2:00PM

Rick

This section was started when gold entered a major bull market in November of 2002. Although some time has passed, the gold bull market is no where near completion.

You should have opportunities ahead or possibly, even now. Gold is currently up about $30 from its recent low. Gold should be bought each time that prices look like they are being pulled into the abyss. This is accomplished by buying lower and lower until the decline comes to a halt.

I have some silver along with other precious metal items. In 2004 silver got spanked for declines of 35% in March and 27% in December. I bought at $5.90 and $6.75, respectively. In this case, I didn't buy on a scale down basis but bought when there was panic selling followed by a little wait.

The point is, your leverage for profit comes in buying down markets, not up markets within bull phases. In order to operate this way, you have to leave the safety of the flock and start acting independently and responsibly.

You can easily figure out for yourself a purchase plan that best suits you. You should spend some time going over the monthly gold chart for percentage price gyrations and become familiar with their extremes. You can view this chart by going to http://www.tradingcharts.com and hitting commodity charts and selecting metals.

In addition, you should check out a book from the library entitled Technical Analysis Of Stock Trends by Edwards and Mcgee. This will help you understand the probabilities of upcoming down moves so you can initiate your plan ahead of time by entering some orders.

Currently, the daily gold chart is forming a huge triangle. This recent decline could be it for awhile. Othwerwise, the probabilities for a strong rally into the $680 area seem to be on the increase. We'll just have to wait and see. Good Luck
 By Rick

09/27/2006  8:31PM

Bluejay...

Is this price a buy price or a wait price?

I prefer the concept of finding it and investing in the idea. But, I haven't yet committed the dollars.

Why am I waiting?
 By bluejay

09/27/2006  1:35PM

The last on gold is $600.90.

In the early days of September gold was jolted lower from about $640 to about $570. The drop registered almost a 10% loss over the short period of a few days.

These drops are a common occurrence and should not be viewed as being anything different than business as usual within this current bull market.

The gold stocks suffered a more severe shock of about 18%. The gold stocks were susceptible as margin borrowing on them had reached high levels.

The upcoming November elections had a part to play in the metal's weakness. A lower gold price would help people think of a lower inflation level and support a generally higher equities market. Along with declining interest rates over the interim the stock market is establishing some all time highs.

The appearence of a sound economy wins votes for the administration and their party.

We no longer live in a completely free market system in this country anymore. There are so many market deals being made behind the scenes just to get votes that it makes you wonder where all this abuse of power ends up.

The Exchange Stabilization Fund, the plunge protection team, was set up some years ago to prevent panic sell offs in the stock market. Now the Exchange Stabilization Fund is secretly controlling other markets. They even have their hand regularly in the gold market and who knows where else as a political tool of the administration.

Whether it be secret deals to get the price of gold lower between England, some large New York brokerage houses, the Exchange Stabilization Fund or just the FED presidents indiretly talking it down, gold will have its work cut out for itself during this bull market.

Somewhere along the road in time the actions of these miscreants will be silenced. Right now these entities are temporarily stealing upward energy from the gold bull.

The gold market is content to stockpile more and more ammunition as it watches this amateur drama unfold with indifference.

For long term gold investors, aside from the current market tinkering, your day will come.

BE PATIENT.
 By bluejay

08/25/2006  10:57AM

NOVAGOLD SUES BARRICK GOLD

The following was reported at 07:56 ET August 25, 2006 by CCN Matthews, "news distribution experts" in Canada.

Vancouver, British Columbia--NovaGold Resources. (TSX:NG)(AMEX:NG) announced today that it has filed a lawsuit against Barrick Gold Corporation (TSX:ABX)(NYSE:ABX) ("Barrick") in the United States District Court for the District of Alaska.

The lawsuit alleges that Barrick has violated United States securities laws by making material misstatements with respect to Barrick's interest in NovaGold's Donlin Creek project in Alaska.

NovaGold currently holds a 70% interest in the venture through its subsidiary NovaGold Alaska; Barrick holds a 30% interest through its subsidiary Placer Dome U.S. Inc.

Barrick has repeatedly stated that it will earn a 70% interest (reducung NovaGold's stake to 30%) by satisfying contractual back-in requirements on or before November 12, 2007.

The lawsuit alleges that these statements are false and that Barrick cannot satisfy those requirements.

The lawsuit seeks a temporary restraining order suspending Barrick's unsolicited tender offer to acquire NovaGold pending an accelerated judgment by the court regarding what actions are necessary for Barrick to satisfy those requirements.

NovaGold is asking the court to order that the requirements include certain milestones (such as completion of an environmental impact statement, a bankable feasibility study and a construction decision by Placer Dome U.S.'s board) that NovaGold believes cannot be met by the contractual deadline of November 12, 2007.

It is the opinion of many that Barrick can not satisfy the requirements of their agreement with NovaGold to acquire a 70% interest in the Donlin Creek Project.

It has been said that Barrick's expertise is not so much as mining people but more as political players. In understanding perspective, it is important to remember that Barrick was pounding gold lower near $250 an ounce some years back by selling 15 year out futures contracts.

The bottom line here was that Barrick was making quite a bit of money on shorting gold lower which thus forced excruciating pain on the gold producing companies that were doing their best to stay alive.

Do we forgive them for this? NO! We continue to watch them with a careful eye hoping that they don't come dropping out of the the sky with their claws wide open in our direction.

NovaGold has the admiration of the gold community for standing up to this bird of prey and forked tongued gold consolidator.

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