October 17, 2018 
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Forum
Topic:
Gold Enters Major Bull Market

       

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 By bluejay

01/15/2007  12:11PM

Gold $626.00

The following was written by Dan Amoss, CFA editor of Strategic Investment in January of 2007:

The U.S. is the Richest Country in the World. You don't say, but how come...?

Shocking CIA Report Reveals America's True Standing in the World!

Recenty, a shocking CIA report came into our hands. It ranked nations based on their current account balances. You know...what's coming in versus what's going out...aka the balance sheet or cash flow.

If the flow is positive, you're creating profits or surpluses. If it's negative, you're pilling up debt, using up more of your budget to pay the interest on your debt, and borrowing more to keep it going!

As the self proclaimed "richest nation on Earth," can you guess where America is on the list? First? Third? Twenty-Fifth? Let's take a look.

#1 is Japan - $165 billion-plus
#2 is China - $164 billion-plus
#3 is Germany - $115 billion-plus

I don't have the space to give you a country-by-country listing, but to summarize...you have the oil-producing countries of the Middle East and South America...then Hong Kong - $20 billion-plus, Algeria - $18 billion-plus...and around here the countries start to slide into deficits.

The countries in Africa, the banana republics of Latin America, Australia, India...followed by the third-worst country - the U.K., at a $57 billion dificit...then Spain, second from the bottom.

But what country is last? Dead last, with double the deficit of all the other nations of the world combined? You probably guessed. America, with its $829 billion dificit!
 By bluejay

01/09/2007  9:34PM

Gold $612.30

Michael

A few years back deals were made between our government and Japan to increase the outstanding amount of dollars as Japan ended up supporting the dollar. An immense amount of these dollars continues floating around seeking a good home.

A good portion of the dollars have found their way into the stock market. This extra dollar liquidity injection was massive. The event has been labeled "Bernanke's Helicopter Drop."

Inflation is the abnormal increase in the volume of money and credit with a continuing rise in prices. To answer your question, yes rising prices in the DOW are supported by inflation in action.

In regards to gold and stock prices trading inversely during the 1980's, it could have happened as a result of an investor safety issue. Although gold was legalized again in 1974 I don't see the opposite relationship working during the 80's as interest rates were higher than they are today coupled with the generally weaker gold prices.

I believe the only meaningful comparison between stock prices and gold is how many ounces of gold you can buy with the value of the Dow Jones Industrial Average(DOW). When the ratio of ounces of gold you can buy compared to the DOW is shrinking the wealth factor of the Dow is declining. When the DOW continues to buy more ounces of gold then the wealth factor of the DOW is increasing. Currently, being in the stock market, albeit it is at a high, compared to the advancing wealth factor in gold is questionable.

Apparently, the only major relevance gold and the stock market have today is that they are both recipients of the growing money supply. Somewhere ahead in time, money will come out of the stock market and flow into everything gold as a result of the growing government and personal debt issues along with the unprecedented amount of outstanding OTC derivatives which is approaching $400 trillion.

For those that are willing to closely inspect the handwriting on the wall, we are approaching conditions similiar to the late 70's that ignited the price of gold.

The feeling here is that unless you have a good percentage of your wealth in gold and gold stocks and a very low percentage in debt and debt related issues(including stocks other than precious metal stocks, government bonds and savings accounts) you will not survive the financial tsunami that will eventually be upon us during this decade.

The price of gold has been declining for about three weeks. The last two meaningful short term metal advances began following three week declining periods.
 By martin newkom

12/30/2006  1:15PM

In years past gold appears to
have been used as a hedge aga-
inst inflation and general
world strife and tumult. It
appeared that when gold went
up the mining companies went
up but faster, especially the
"Kafirs" (so. africa) Even
deBeers would move the same.
Now, with ETFS those vehicles
seem to move with the metal
price AND with other stock issues.Gold, Silver and Diamond
ETFs are all up right with the
other (stk) market.
 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

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