Wt Physica Gold Discussion Threads

[abundance99] 15/12/2007 00:17

Interesting day. PHAU drops but the pound drops more and so the value of my holding goes up. The coming weakness of the pound is one of my reasons for holding gold (although £s strength recently against dollar has meant that haven't made the percentage gain that gold in dollars has made over that time which is frustrating).

[spob] 07/12/2007 02:59

I think the same applies to Gold. I mean the price has continued to rise throughout a stock market bull run which suggests that the rise in the gold price has everything to do with the fundamentals of demand and supply and very little to do with people accumulating gold in anticipation of financial armageddon.

That's not to say that financial armageddon will not happen next year :)

[spob] 07/12/2007 02:52

The way i see it, is that most of the mid range oil stocks are trading at such a huge discount to the oil price ( market value of each barrel of reserves in the ground ) that the oil price could fall to $35 and they would still be cheap.

Owing to the demand/supply situation i do not see oil going anywhere near that level.

Human nature being what it is you will always get extreme over reactions along the way. Which could see short term pullbacks to $50. I very much doubt that any such pullbacks would hold for very long.

When oil hit $70 a while back for the first time there was a journo in Australia predicting that oil would be below $42 within around three years. He argued that the oil price rise was entirely based on speculation and had nothing to do with demand and supply. At the time i emailed him offering to make a 1K bet just for fun. I'm still waiting for a reply.

[abundance99] 06/12/2007 20:29

I have less invested since the summer - had started to take money off the table before the market falls but still lost a bit.

My reason for being so positive on commodities in general and gold in particular is that, having read as much as I can about the current economic situation, I am convinced by the bear case for stocks and for the economy in general. I am also not willing to risk as much as I was and so only have about half the amount I had back in May in the market. The rest is sitting in the bank gradually being paid into the mortgage! Gold is 40% of my invested amount.

In the end, gold and oil will probably sink or swim together. I have been looking to gain an exposure to oil and am thinking of dipping my toe in the water. The supply and demand picture looks extremely bullish for price long-term. Not convinced that a recession will reduce overall demand by that much. How low do you reckon oil can go? If it hit 80 I would certainly be in but sub 85 would be very tempting, especially with the pound still over $2 (the coming weakness in the pound another good reason to hold gold and commodities).

[spob] 06/12/2007 02:26

40% is a lot to put in one theme.

How do you sleep at night.


Then again, my oil portfolio is probably somewhere around that level and i sleep very well indeed.






Oil Will Hit $100 a Barrel Within 6 Months, Boone Pickens Says

By Margot Habiby

Dec. 5 (Bloomberg) -- Crude oil prices are likely to reach $100 a barrel within six months as global demand exceeds supply, Boone Pickens, chairman of Dallas-based BP Capital LLC, said today.

``You're going to $100,'' he said in an interview in Dallas. ``There's no question about that.''

Crude oil prices rose after the Organization of Petroleum Exporting Countries, rejecting calls to increase output, decided to keep its production targets unchanged. Oil was down for the day after an Energy Department report showed that U.S. fuel stockpiles rose.

Futures fell 86 cents, or 1 percent, to $87.46 a barrel at 2:30 p.m. as floor trading ended on the New York Mercantile Exchange. Prices touched $90.39 in intraday trading.

The OPEC decision ``went the way I thought it would,'' Pickens said, adding that OPEC doesn't have the capacity to continue to raise production.

Global crude demand is about 88 million barrels a day, and supply is around 85 million barrels a day, he said, adding that the only way to affect demand is with higher prices.

Global oil demand this year will average 85.7 million barrels a day, the International Energy Agency said in a report on Nov. 13. The Paris-based agency is an adviser to 26 developed nations.

[abundance99] 04/12/2007 14:53

Couple of interesting opinion pieces. The first one isn't impressed with Goldman's advice:



If the stats in this article are correct maybe we should all be heading for the hills (with our tiny bags of gold!)



I am long gold. I am totally out of shares and into commodities at the moment. Gold is around 40% of my investments. I am pessimistic for the future of the economy. Bought in at 665, 692, 745 and badly timed at 831. Hoping for four figures next year.

[spob] 01/12/2007 09:24

I must say that i wasn't prepared to go long gold without a hefty pullback from here.

So i shall watch and wait

[spob] 01/12/2007 09:22

Here you go....


Gold, Silver Fall as Dollar Rebounds, Goldman Sachs Says `Sell'

By Pham-Duy Nguyen

Nov. 29 (Bloomberg) -- Gold and silver fell for a third straight day after a gain in the value of the dollar reduced demand for the precious metals as alternative investments.

The dollar rose after a report showed U.S. economic growth surged in the third quarter. Goldman Sachs Group Inc. said the currency's decline is nearing an end and urged investors to sell gold. The metal still has gained 26 percent this year after the euro climbed to a record against the dollar.

``Gold's raving rally is over,'' said Frank McGhee, the head metals trader at Integrated Brokerage Services LLC in Chicago. ``The euro is pulling back. We're going to see an easing of inflation and geopolitical issues.''

Gold futures for February delivery fell $5, or 0.6 percent, to $802.30 an ounce on the Comex division of the New York Mercantile Exchange. The price reached a 27-year high of $848 on Nov. 7.

Silver futures for March delivery fell 8.8 cents, or 0.6 percent, to $14.445 an ounce. The metal still is up 12 percent this year.

Gold may decline 15 percent to 20 percent next year as turmoil in financial markets eases and a slump in the dollar will slow, Goldman Chief Economist Jim O'Neill said.

Dollar Rally

The dollar rose as expectations for another interest-rate cut this year eased. Interest-rate futures showed a 68 percent chance the Federal Reserve will lower the overnight lending rate to 4.25 percent by Dec. 11, compared with a 94 percent chance yesterday.

The Fed cut its benchmark rate by 0.25 percentage point to 4.5 percent on Oct. 31, the second reduction this year.

Gold may be too costly for jewelers, the biggest buyers of the metal, some analysts said. Jewelers accounted for about 67 percent of purchases last year, according to the producer-funded World Gold Council.

``We continue to consider gold expensive at $800 an ounce,'' said John Reade, an analyst for UBS AG in London. ``We continue to look for an opportunity to get tactically long of gold again, but need to see speculative positioning reduced and jewelry demand return.''

UBS expects gold to fall to $750 within a month. Speculative long positions, or bets prices will rise, outnumbered short positions by 172,390 contracts on the Comex in the week ended Nov. 20, data from the U.S. Commodity Futures Trading Commission show. Net-long positions fell by 18,395 contracts, or 10 percent, from a week earlier.

Gold is headed for the seventh straight annual gain. Last year, the metal rose 23 percent as the dollar fell 10 percent against the euro.

Investment demand in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, has risen 34 percent this year to a record 609 metric tons.

[spob] 01/12/2007 09:20

I think i heard somewhere that Goldman Sachs said short gold yesterday, therefore the herd will follow.

[abundance99] 30/11/2007 14:20

Not sure I understand why gold is falling given that shares are rising on expectations of a further interest rate cut.

[spob] 29/11/2007 23:34

You're welcome, same for me regarding gold.

Although i'm just reading/watching/learning gold right now.

No position at the moment.

[abundance99] 29/11/2007 18:29

Hi Spob,

Thanks for the charts. Makes this something of a one-stop shopwhere I can check everything!

[spob] 27/11/2007 09:14

Added some charts & links including PHGP

[abundance99] 26/11/2007 23:56

I'm invested here and optimistic about gold's prospects.

I find this a very useful site, lots of info and opinion about the prospects for the precious metals: silverstrategies.com

Spob, would appreciate it if you could add a chart for the gold price in sterling. I believe that there is a new ETF - PHGP. I bought in when the only ETF was this one where the price is quoted in dollars. It makes no difference to the profit / loss of course but it would just be useful to be able to keep an eye on the gold price in pounds as the exchange rate has an impact.